DEA Secretary Ajay Seth is confident of 'very strong growth' in the third as well as fourth quarter, and even Q2FY25 growth number too will look up, adding that the 7% growth rate for the fiscal year is 'very much doable'.
Speaking to CNBC-TV18 on the sidelines of the IMF-World Bank annual meeting in Washington D.C., Ajay Seth said one should not go by the Q1FY5 GDP reading of 6.7% which had its 'reasons', but the overall growth for the year should be in the order of 7%, as forecast by IMF. The RBI has projected that the Indian economy will grow at 7.2% in FY25.
Borrowing Plan
DEA Secretary also said that the Centre is not looking at any additional borrowing plan as the year started with a higher cash balance. During the 2024-25 Budget announcement, Centre had marginally cut the gross market borrowing target to Rs 14.01 lakh crore to finance its fiscal deficit of 4.9 percent of the GDP.
DEA Secretary Ajay Seth also said the response to Centre's buyback of government securities - conducted by the Reserve Bank of India - has been good. Two instalments have been completed totalling up to Rs 50,000 crore, aimed at smoothening the repayment profile, Seth added. During the pandemic, Centre had significantly increased the government borrowing of varied durations, and as more of these borrowings come up for maturity over the next few years, there was a need to smoothen the repayment.
Infrastructure Investment
Ajay Seth also said that the Centre has lined up significant investments in infrastructure, including in areas like road and railway connectivity, climate mitigation and energy transition. When such investments happen in the economy, these projects create jobs. Not just public capital, infrastructure is a potential area to also attract private capital, said Ajay Seth, adding that Centre is exploring how private capital can be mobilised by leveraging banks' financing.
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