High possibility of India’s FY24 GDP growth touching 8%: CEA V Anantha Nageswaran

Chief Economic Adviser V Anantha Nageswaran.

There is a high possibility of India’s economic growth touching 8 percent in in FY24, government's chief economic adviser V Anantha Nageswaran has said.

Nageswaran said he would be happy if the gross domestic product (GDP) were to have a 9.5-10 percent rate like that of China but the context had shifted.

Speaking at an event in New Delhi on May 8, the CEA said that 6.5-7 percent growth rate was expected to continue in the coming years and it was important to maintain it.

He declined comment on the Reserve Bank of India's guidelines on project financing, saying it was a draft proposal.

Reports have said the government is evaluating the RBI’s draft rules that tighten the norms for infrastructure project loans by calling for higher provisions for such works.

A Reuters reports said that banks would appeal against the RBI’s proposal. The Indian Banks Association (IBA) was gathering inputs and would write to the central bank.

The RBI wants banks to set aside a provision of 5 percent of the loan amount for projects at the construction phase. This will reduced to 2.5 percent once the project gets operational and to 1 percent when an adequate level of cash flow is achieved.

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Nageswaran had on February 29 said the country's continued out-performance was making a case for international organisations to raise their estimates of India's potential growth rate to 7 percent or even higher.

India's GDP grew 8.4 percent in the December quarter, the highest in six quarters. Last time India's economy grew at a faster clip was in the first quarter of 2022-23, when it clocked a growth of 13.1 percent, now revised down to 12.8 percent.

The third quarter uptick was propelled by a double-digit growth in the manufacturing sector, with construction not too far behind, growing at 9.5 percent.