Private sector capex vital for growth: CEA

CHENNAI: Chief Economic Advisor (CEA) Dr V Anantha Nageswaran on Thursday expressed optimism about India’s growth potential.

Speaking at a special interactive session organised by FICCI here, he affirmed that India’s real GDP growth for FY23 was a robust 7.2%, with expectations for the final figure to be even higher.

“We have had two successive good years, strengthening the recovery from the pandemic-induced contraction,” stated he said, adding, the lower growth figures reported in the third quarter of FY23 due to base effect adjustments, not a loss of economic momentum. Dr Nageswaran also provided an outlook for FY24, projecting a real GDP growth of 6.5%, a figure supported by both the Ministry of Finance and the Reserve Bank of India.

“The risks surrounding this number are evenly balanced, suggesting a strong likelihood of achieving this growth target”, he added.

“We were the 10th largest economy in 2014, and we expect to become the third largest economy in 2027,” he exuded confidence.

Emphasising that this progression requires the nation to continue to “do the right thing,” Dr Nageswaran said India’s contribution to global GDP growth has risen six-fold since the turn of the millennium. Addressing the impact of the pandemic on private consumption, Dr Nageswaran observed that despite setbacks, the trend line for private consumption has caught up to pre-pandemic levels.

The CEA also emphasised the economy’s robust expansion, driven by strong growth in industry, services, and construction sectors, while highlighting companies’ confidence in expansion, supported by steel and cement production data, indicating a post-pandemic rebound in line with pre-pandemic trends.

He said “There is confidence among the companies and firms and they are looking to expand.”

“We do expect that capital expenditure by the Indian private sector will be an important contributor to growth in the coming years,” he added.