Chief Economic Adviser (CEA) Anantha Nageswaran said that the Indian economy is performing well and may achieve a growth rate at the upper end of its 6.3-6.8 per cent projection, provided there are continued measures to promote foreign direct investment and an increase in capital investment by the private sector, along with boosted urban consumption.
“All in all, given the global environment, our economy is doing quite well,” the CEA told reporters on Friday at a virtual press conference after GDP data for 2024-25 and January-March were released.
“And if we continue with the efforts to bring in more foreign direct investment and the private sector, if it continues its increase in capital investment, which we saw in 2024-25 and urban consumption picks up on the back of let’s say, better capital formation, hiring and compensation, then we can probably achieve a growth rate which is at the higher end of this range (6.3-6.8 per cent),” he added.
GDP numbers
The Indian economy grew by 6.5% in real terms for FY25, aligning with expectations.
As per the second advance estimates of National Statistical Office (NSO), the Indian economy was projected to grow at 6.5 per cent in 2024-25. The Reserve Bank of India (RBI) estimated 6.5 per cent GDP growth for the fiscal year 2024-25.
Notably, India’s GDP grew by 9.2 per cent in FY24, while the economy grew 7.2 per cent in FY23 and 8.7 per cent in FY22.
The government also released the official GDP growth data for the January-March quarter on Friday. The economy grew 7.4 per cent for the quarter ended on March 31, 2025.
Meanwhile, the growth rate of the Indian economy in the April-June, July-September, and October-December 2024 quarters stood at 6.7 per cent, 5.6 per cent, and 6.2 per cent, respectively.
Impact of unusual monsoon
Speaking on the impact of the unusual onset of monsoon and its impact on the vegetable prices, Nageswaran said, “To say there will be a problem as of now, I think every indication is that crop produce will be good and with adequate inventory, the benign food price trends will continue.”
Monsoon rainfall is expected to be above normal in India, particularly in India’s key rain-fed agricultural belt, as per IMD. Additionally, monsoon arrived early in several states this year.
Global growth expectations
CEA stated that global growth for 2025 and 2026 is expected to be slow amid the global uncertainties. However, the forecast cuts will be smaller for India in the global cuts.
CEA on food inflation
Speaking on inflation, he further said that food inflation is likely to remain low due to a good harvest and above normal monsoon.
“Food Inflation remains benign due to good rabi harvest, higher summer sowing, healthy procurement, and above-normal monsoon. Exports remain robust, forex reserves provide 11 months of import cover. Declining crude oil prices will potentially lower import bills, create fiscal space and alleviate external economic pressures,” CEA said.
Outlook for India’s FY 26 growth
The government maintains its outlook for 2025-26 growth at 6.3-6.8 per cent, driven primarily by private consumption, particularly the rural rebound, and growth in services exports. Various agencies have projected India’s growth to fall within the range of 6.3-6.7 per cent for 2025-26.
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