Govt may have to pitch in to boost aggregate demand

• FMCG sales volume moderated in Q4

- FE BUREAU

BUOYED BY A resilient 6.5% gross domestic product (GDP) growth in FY25 despite global headwinds, chief economic adviser Anantha Nageswaran on Friday said the government has retained its forecast of 6.3-6.8% growth for the current financial year.

Private consumption, especially the rural rebound, and resilient services exports are seen to be key growth drivers in the current year.

Multiple agencies have projected India's growth to be in the range of 6.3-6.7% in FY26.

He said high-frequency indicators for April show strong industrial and commercial activity.

Food inflation remains benign due to positive factors such as good rabi harvest, higher summer sowing, healthy procurement, and above-normal monsoon, he said.

"If India continues with the efforts to bring in more foreign direct investment (FDI) and private capital investment continues as in FY25, urban consumption picks up on the back of better capital formation, hiring and compensation, then we can probably achieve a growth rate which is at the higher end of this range," Nageswaran said.

"I think the conditions are in place for a low inflation, steady growth environment supported by monetary policy and the fiscal stability," he said.

India's export performance has held up well amid global trade uncertainty. Merchandise trade and services surpluses have improved, continuing into April as well, Nageswaran said.