India to clock GDP growth of 6.5% in FY24 despite rainfall deficit: CEA

Chief Economic Advisor V Anantha Nageswaran on Thursday said the economy is expected to grow at 6.5 per cent in the current fiscal notwithstanding deficient monsoon rains.

He also said that there is no real cause for concern that inflation would spike out of control as both the government and the Reserve Bank are taking adequate steps to maintain supply and keep prices under check.

The CEA said food inflation is likely to subside with the arrival of fresh stock and government measures. However, the impact of deficient rains in August is to be watched.

“There is momentum in economic activity in general and it is not driven by price-related distortions. Therefore our projections still are very comfortably placed at 6.5 per cent for the current financial year,” he said.

Risk is evenly distributed to around 6.5 per cent growth projection for FY2023-24, he said while briefing media following the release of first quarter GDP numbers. Rising crude prices may warrant attention and prolonged geopolitical uncertainty and likely tighter financial conditions can pose risk to growth, he added.

India recorded economic growth of 7.8 per cent in the April-June quarter of 2023-24 against 13.1 per cent in the year-ago period.

With regard to fiscal deficit, Nageswaran said there is no threat to 5.9 per cent fiscal deficit announced in the Budget.