The government's senior economic advisor, Vanantha Nageswaran, said on Wednesday that the economy is expected to expand by over 7% in the current fiscal year and that inflation is expected to remain low.
"The signs point to our maintaining our current rate of steady development. We don't now see any room for unpleasant upside shocks (with regard to inflation)," Nageswaran stated at a gathering in the nation's capital, New Delhi.
March saw a five-month drop for the annual retail inflation rate of 4.85%, mostly as a result of lower gasoline costs. Nageswaran conveyed hope, stating that the present growth trajectory is viable for the ensuing ten years.
He said this in New Delhi during an event organized by the National Council of Applied Economic Research.]
He stated that the baseline assumption is a steady convergence of inflation towards the middle of the target range, but he acknowledged the risk of unanticipated events impacting inflation, particularly in geopolitics.
"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," stated the top economic adviser.
The Reserve Bank of India targets inflation between 2% and 6%, with a goal of 4% before taking rate reductions. The Indian economy is now in a stronger position to have "non-inflationary" development, according to Nageswaran.
He calculated that the previous fiscal year, which ended on March 31, had an 8% growth in the GDP. He predicts growth of 7% for the current fiscal year, which begins on April 1.
