India has displayed remarkable resilience in recovery after a Covid-induced slump in growth, chief economic adviser (CEA) V Anantha Nageswaran said on Saturday. The country has also managed to keep price pressure under check at a time when even developed nations are grappling with runaway inflation, he added.
Addressing an event on Indian Economy: Prospects, Challenges and Action Points at Haryana Institute of Public Administration, the CEA stressed that key indicators of the economy have crossed their pre-pandemic levels. The latest GDP data showed real growth in FY22 exceeded the pre-pandemic (FY20) level by 1.5%, private consumption by 1.4% and fixed investment by 3.8%. On a year-on-year basis, the economy grew 8.7% in FY22 from -6.6% in the previous year.
“Today, we have a strong revival of private investment, and the country has comfortable forex reserves to withstand turbulence in the international currency market. The exponential growth of digital payments in India during the last few years is an indication of fast changes in the informal sector,” Nageswaran added.
The developed world is moving from low to high inflation and “it is in such times that we have managed to keep inflationary pressure under check”, Nageswaran said. Inflation in the US, for instance, hit a fresh 40-year high of 8.6% in May. India’s retail inflation scaled an 8-year peak of 7.79% in April.
Quick and decisive policy interventions by the government, duly supported with monetary measures by the central bank, have enabled the economy to stage a smart rebound, the CEA said. With its strong fundamentals, the Indian economy is much better placed now than many others, he added.
As per the projections of the International Monetary Fund, India will become a $5-trillion economy by 2027, against over $3 trillion now, Nageswaran said.
Earlier this week, he had said if the dollar GDP of the country doubled every seven years, India would emerge as a $20-trillion economy by 2040 with a per capita income of close to $15,000.