Chief Economic Advisor V. Anantha Nageswaran today said the momentum in the economy is good enough to deliver a growth rate of 7.3% or more, so that FY26 growth estimates of 7.6% are achieved. Addressing a press conference on GDP growth of 7.8% in Q3, FY26, under the new 2022-23 series launched today, Nageswaran said non-inflationary growth trend is expected to continue in the Indian economy and the new national income series will not change the fiscal consolidation trajectory of the government.

Speaking on the outlook for the economy, Nageswaran said the economy continues to maintain strong growth supported by broad based activity, and favourable supply side conditions.

The Indian economy posted GDP growth of 6.3% in the first quarter of the current fiscal and zoomed to 8.4% in the second quarter. “Growth rate in the fourth year should be 7.3% or more to be able to achieve a real GDP growth rate of 7.6%. Momentum in the economy is good enough to deliver us a 7.3% growth rate in the fourth quarter,” Nageswaran said.

No change in fiscal consolidation trajectory: CEA

“The post Covid highlight of the Indian economy has been sustained non-inflationary or moderate inflation growth. That combination is expected to continue in 2026-27. Fiscal consolidation is on track. In the light of the 2022-23 base revision, the nominal GDP roughly being lower by Rs 12 lakh crore or so, the estimated fiscal deficit for 2025-26 will now be 4.5%. But other indicators like the primary deficit, revenue deficit, or effective capital expenditure, or capex to GDP ratio will remain broadly unchanged. GDP revision will not alter the fiscal trajectory of the union government,” he added.

Nageswaran said sustained growth of 7% over the past three years supports the thesis of the Economic Survey that the potential growth of the Indian economy is now around 7%."

Three consecutive years of 7% plus GDP growth vindicates and corroborates our revision to the potential GDP growth of the economy to around 7%. In the post Covid era, the sustained non-inflationary expansion of the economy has held up not only in absolute terms but also in terms of how others have been doing in the post-covid era, where they are struggling with rising public debt and low growth,” Nageswaran said.  

“Private consumption is quite resilient. Rural consumption has remained strong. Urban consumption is recovering on the back of direct and indirect tax relief provided,” he added.