Chief Economic Advisor to the Government of India, V. Anantha Nageswaran, has indicated that the Q2 GDP growth estimate may be revised upwards in the coming days.
Speaking at Bharat@100 Summit, organised by ASSOCHAM, he emphasised that the underlying growth story of the Indian economy remains strong, with exports showing resilience in a challenging global environment. Nageswaran cautioned against overinterpreting the Q2 numbers, noting that the global uncertainty index had spiked during the period.
Further, he highlighted India's ability to adapt to the challenges posed by climate change and noted that China's role in the global supply chain has become indispensable. He stressed the need for India to navigate these challenges effectively to sustain growth in the current global economic landscape.
Nageswaran noted that the global environment remains challenging and emphasised the importance of leveraging domestic factors to support overall GDP growth.
Nageswaran also said that India's growth boom years used to end in 3-5 years, further adding that Indian economy used to overheat, since supply side wasn't built out. But, in last 10 years, supply efforts have been boosted via highways, trains, airports, ports' turnaround time and railway electrification.
Nageswaran expressed confidence that India's GDP growth target of 6.5%-7.0% for financial year 2025 remains achievable, despite a slowdown in Q2. He highlighted that large enterprises often rely on MSMEs for capital, a trend evident in negative working capital. Nageswaran urged large corporates to participate in government programs.
He further noted that the Indian corporate sector has enjoyed significant growth over the last four years. However, compensation growth has weakened, with companies now focusing on deleveraging, which he described as a positive development.
CEA also said, in view of Q2 GDP of 5.4 percent, we should not throw the baby out with the bathwater, as underlying growth story remains intact.
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