At 6.5%, full-year GDP growth estimate realistic, says Chief Economic Advisor VA Nageswaran

Chief Economic Advisor V Anantha Nageswaran said on Friday that the the revised 6.5 per cent GDP growth estimate for the current finanicial year is realistic. His remarks followed the release of official data on the country’s GDP, which showed the economy expanded 6.2 per cent in the third quarter of the current financial year. Earlier, the full-year GDP growth was estimated at 6.4 per cent.

Q3 FY25 GDP Data | ‘Maha Kumbh-related Spending, Government Capex to Aid GDP Growth,’ Says CEA

According to the Chief Economic Advisor, two things are expected to push GDP growth to 7.6 per cent in the final quarter of the current financial year:

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• A significant pickup in the central government’s capex expenditure

• Additional spending linked to the just-concluded Maha Kumbh congregation

"With an estimated 50-60 crore people visiting Prayagraj for the Maha Kumbh, the surge in spending could positively influence economic activity," he said. A GDP growth rate of 7.6 per cent is required in the March quarter maintain full-year GDP growth of 6.5 per cent.

The CEA expressed confidence that the required growth rate of 7.6 per cent is achievable in the final quarter of the current financial year.

What the Chief Economic Advisor Said About Market Crash

Looking at the long-term prospects of the country’s economy and its market’s track record, one shouldn't be over-interpreting the near-term numbers, said Nageswaran.

Earlier on Friday, Dalal Street benchmark indices Nifty 50 and Sensex slumped 1.9 per cent each amid a broad-based sell-off as investors globally fretted over uncertainty surrounding the global trade situation after US President Donald Trump said that 25 per cent duties on imports from Canada and Mexico will come into effect on March 4, not April 2 as suggested by him earlier. The 47^th US president also said that goods from China will be subject to an additional 10 per cent duty, having already floated 25 per cent tariffs on shipments from the EU this week.

The Sensex fell 1,414.3 points to end at 73,198.1 while the Nifty50 gave up 420.4 points to settle at 22,124.7. The market crash left investors poorer by about Rs 9 lakh crore as measured in the overall market capitalisation of BSE listed companies, provisional exchange data showed.

“The India stock market went almost parabolic between July 2024 and October 2024, and those parabolic gains are now currently being unwound in the marketplace… As we speak today, we notice that the US stock market is significantly down, and the Indian market today has reflected that as well,” said the CEA.

Economy Approaching $4 Trillion…

Nageswaran said that the economy is on the verge of crossing $4 trillion in the current financial year.

He also highlighted that seasoned market experts, like Chris Wood of Jefferies, continue to be optimistic about the country’s long-term growth potential.

What the CEA Said About Inflation

Inflation is trending down, he said.

Influenced by the trade policies of major economies amid a slowing disinflation, the near-term global economic outlook is uncertain but India's economic momentum is expected to be sustained thanks to strong rural demand and a revival in urban consumption, according to the CEA.

Union Budget 2025

The focus of the FY26 Union Budget on areas like agriculture, MSMEs, investment and exports is likely to enhance the domestic economy’s economic prospects over the medium term, according to the Chief Economic Advisor.

With inputs from agencies

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