Double-digit growth likely in FY22: CEA K Subramanian

Chief economic advisor K Subramanian on Tuesday has said India is likely to register double-digit growth in the current financial year. Subramanian also said that inflation will remain in control in the country on the back of ‘clear policy focus' on supply-side measures.

In a televised address, on DD News after the release of the second-quarter GDP estimates for FY22 by the National Statistics Office, Subramanian has told, “India is likely to have a double-digit growth this year. The overall growth for the first half has been 13.7%. So, even a little more than 6% growth in the subsequent quarters should be able to deliver double-digit growth for this year. Thereafter we will grow at 7% plus in different scenarios.”

“Impact of the seminal second-generation reforms will unfold in terms of productivity and investment,” Subramanian added.

In a presentation, Subramanian pointed out that inflation should remain controlled in India because of clear policy focus on supply-side measures while enhancing demand, even as he also maintained that in the wake of the global economic crisis in 2008, runway inflation manifested because the policy focused only on demand.

The CEA also said that the financial sector has emerged stronger with better asset quality, greater provision coverage, and greater capital adequacy. “This is crucial for investment going forward,” he said pointing out in the presentation that the net profit of the public sector banks in June this year stood at ₹14,012 crore up 140% from June 2020 and 255% compared with June 2019.

The Indian economy beat the majority of estimates to grow at a rate of 8.4% in the second quarter (Jul-September) of the current financial year, against a contraction of 7.4% during the same period of the previous financial year. It was projected to grow in the range of 7.8%-8.5%.

In October this year, Subramanian announced his decision to step down as the chief economic advisor. His tenure is scheduled to end on December 3. He may, however, continue to serve till mid of December.