India could grow at 7% annually this decade: chief economic adviser

Published Tue, Sep 13, 2022 · 04:15 PM

INDIA should be able to grow at about 7 per cent annually this decade as investment spending is expected to rise and the digital economy picks up, the chief economic adviser said on Tuesday (Sep 13).

The government has already said it expects the world’s fifth-largest economy to grow at more than 7 per cent this fiscal year, after it expanded by 13.5 per cent in the April-to-June quarter, the fastest pace in a year.

Economists, however, say growth is likely to lose momentum in the coming quarters as higher interest rates cool economic activity.

“While international agencies are showing our trend growth at 6 per cent, I feel the trend growth will easily be 7 per cent per annum for the remainder of this decade and beyond,” said Chief Economic Adviser V. Anantha Nageshwaran at an event in New Delhi.

“I am taking 6 per cent as the very easily attainable growth rate and I am adding 0.5 per cent coming from the capex (capital expenditure) pool and another 0.5 per cent will come from the digital public infrastructure that we have created.”

Nageshwaran said that “investment spending which we had experienced back in 2006 to 2012, is going to come back and that is going to be 1 major driver (for growth)“.

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The rupee’s depreciation of more than 7 per cent against the US dollar this year has pushed up the cost of imported items for consumers and businesses, but Nageshwaran said the country was not defending the currency.

“I don’t think Indian fundamentals are such that we need to defend the rupee. The rupee can take care of itself,” he said. REUTERS

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