July-September GDP may be revised; 6.5-7% growth possible in FY25, said CEA Nageswaran

On Thursday, Chief Economic Advisor V Anantha Nageshwaran said that during October- November economic activity increased in some sectors and gross domestic product (GDP) growth of 6.5-7 percent is possible in the current financial year. He also said that the 5.4 percent GDP growth estimate for the second quarter may be revised further, as the current estimates are not seasonally adjusted.

"I don't think we should throw the baby out with the bath by reacting to these figures. Because the underlying growth story is still largely intact," Nageshwaran said. India's economic growth slowed to a seven-quarter low of 5.4% in the July-September quarter from 6.7 percent in the April-June quarter.

Nageswaran said the slowdown in gross domestic product (GDP) growth in the second quarter could be due to some "religious rituals" and excessive monsoon rains in September, and could also be due to other longer-term issues that are beginning to emerge.

So explanations could range from normal to more serious, he said, adding that this is the first estimate of second-quarter GDP growth. "It could be revised upwards," Nageswaran said. He said the Economic Survey has projected 6.5-7% for fiscal 2024-25. "To be able to achieve 6.5% growth for the full year, we need 7% real GDP growth in the next two quarters, of which two months of the third quarter have already ended. We are in the third month.

I think it is possible if you look at some of the progress made in specific sectors. So I believe it is possible to achieve 6.5-7% growth this year," Nageswaran said at an Assocham event. The Indian economy will grow by 8.2% in FY 2023-24.

The Reserve Bank of India (RBI) has projected growth at 7.2% in the current fiscal, higher than the 6.5-7% estimate put forth in the Finance Ministry's Economic Survey.