Reforms can induce over 7% growth

The Indian economy can grow at more than 7 per cent on a sustained basis in the medium term if the country can build on the structural reforms undertaken over the last decade and carry out next-generation reforms that are bottom-up in nature, the Economic Survey 2023-24, tabled in Parliament on Monday, said.

- ASIT RANJAN MISHRA

The Survey, authored by the chief economic adviser in the finance ministry, V Anantha Nageswaran, along with his team of economists, "conservatively" projected the Indian economy to grow at 6.5-7 per cent in FY25, with risks evenly balanced, recognising the fact that market expectations were on the higher side.

On the downside, the Survey said, any escalation in geopolitical conflicts in 2024 may lead to supply dislocations, higher commodity prices, reviving inflationary pressures, and stalling the easing of monetary policy with potential repercussions for capital flows. "This can also influence the RBI's monetary policy stance," it added. The Survey said the global trade outlook for 2024 remained positive, with merchandise trade expected to pick up after registering a contraction in volumes in 2023.

"Conversely, increased fragmentation along geopolitical lines and renewed thrust on protectionism may distort merchandise trade growth, impacting India's external sector," it cautioned.