India's chief economic adviser (CEA), V Anantha Nageswaran today expressed hope of a possible upside to GDP growth for the current financial year, especially on the back of second-quarter economic growth of 7.6% in real terms surpassing all estimates.
Without pegging any figure on the probable upside to growth, Nageswaran mentioned that "we may be underestimating India's GDP, based on the current statistics, rather than overestimating it."
July–September quarter growth was expected to remain in the region of around 7%. However, with fillip from manufacturing and construction, economic growth for the quarter surpassed all estimates.
Nageswaran said that the momentum continues in the economy in the ongoing quarter. "Real GDP is higher than the most optimistic estimates by private economists. The momentum in the economic growth continues in Q3 as well. There is an upside to the FY24 GDP. We have to see what kind of upside it imparts to the year’s numbers," Nageswaran said.
"India continues to be an outlier. India's economic growth is higher than the growth of many other countries in the last few quarters. That has been a trend," Nageswaran added.
"Bulk of growth has come from manufacturing. In the challenging global environment it is not a surprise that the external trade has not shown the performance of 2022. Growth is driven by the industrial sector and continued expansion in the PMI," he added.
On rural demand, the CEA said rural demand continues to grow in Q1 and Q2 of the current financial year. "Rural consumers have done better than urban consumers. Rural demand is steady if not spectacular," he added.
Nageswaran said the trend in the inflation numbers is comfortable and fiscal management remains on track.