The Indian government’s chief economic adviser forecasts the country’s economy will grow by over 7% during the current fiscal year.

V Anantha Nageswaran also predicts India’s economy can maintain 6.5%-7% growth for a decade, thanks to investment in physical and digital infrastructure.

Nageswaran stated that India wouldn’t see any “nasty upside” on inflation.

“There can always be scenarios in geopolitics that can cause inflation to be more than we expect, but at this point, the baseline scenario is that inflation gradually converges to the mid-point of the target range,” he said.

Nevertheless, according to the central bank’s April bulletin, Mint reports that extreme weather events and prolonged geopolitical tensions could result in volatile crude oil prices, posing inflation risks.

Speaking at an event hosted by the National Council of Applied Economic Research in New Delhi, the chief economic adviser said: “The omens are good for us to continue the steady growth rate.”

Nageswaran further stated that India’s monetary policy committee is tasked with maintaining inflation within a target range of 2% to 6%, and the Reserve Bank of India aims for it to stabilise at 4% before considering rate cuts. 

The adviser added that the Indian economy was better placed than before to pursue “non-inflationary” growth.

Furthermore, in an article entitled ‘State of the Economy’ last month, the RBI said that conditions are aligning for a sustained rise in real GDP growth, projecting an average of over 8% between 2021 and 2024.

Additionally, RBI Deputy Governor Michael Patra recently stated that India has the potential to achieve a growth rate of 10% in the next decade, positioning it to become the world's second-largest economy by 2032 and the largest by 2050.

Last month, the central bank’s monetary policy committee held the FY25 forecasts for real GDP at 7% and consumer price-based inflation at 4.5%.