CEA Anantha Nageswaran has a message for global rating agencies after surprise 8% growth

Chief economic advisor V Anantha Nageswaran said the estimate-beating 8.4% growth in the third quarter makes a compelling case for an upgrade by global rating agencies in their FY24 forecasts to at least 7%. 

"Overall, the economy ticks many boxes in the right way...so there is a case for international agencies to reappraise their estimate of potential GDP growth in India closer to 7 percent, if not above," he said.

In a virtual presser after the NSO pegged FY24 growth forecast for India at 7.6%, Nageswaran said private investments will likely gain further traction in the next fiscal. 

There is evidence of sustained investment activity in the economy, the CEA said, pointing at the rise in imports of capital goods, expansion in manufacturing capacity utilisation and increasing investment by private non-financial companies.

Terming India as an outlier, Nageswaran said the growth rate for the December quarter eclipsed that of China (5.2%), Indonesia (5%), the US (3.1%), Mexico (2.5), Japan (1%) and France (0.7%).

"So the actual performance of the economy has continued to defy expectations and do better than what many had projected underscoring the fact that a structural transformation of the economy is indeed underway, both in terms of physical infrastructure and digital infrastructure as well as inclusion agenda, boosting the purchasing power of Indian households...," Nageswaran said. 

On the agriculture sector, he said prospects of healthy rabi harvesting, and expectations of the fading away of El Nino and the forecast of a normal monsoon bodes well for a better-than-normal kharif sowing. 

He further said that improvement in household consumption, bright prospects for capital formation owing to an upturn in the private capex cycle, improved business sentiments, healthy balance sheets of corporates, and the government's continued thrust on capital expenditure will drive growth.