Despite rising geopolitical tensions and high oil costs, the Indian economy would expand by around 6.5% this fiscal year, according to Arvind Virmani, a member of the NITI Aayog.
The banking crises in the US and Europe, according to Virmani, have no bearing on the Indian financial system.
“So, in the current fiscal year, I have lowered my India's economic growth projection by 0.5% due to all the developments that have occurred in the last year.
So it is 6.5%, plus or minus 0.5%, he said, according to PTI.
Due to a slowdown in consumption and difficult external circumstances, the World Bank and the Asian Development Bank have forecasted a decrease in Indian economic growth between 6.3 and 6.4 percent.
The International Monetary Fund (IMF) has revised its prior forecast for India's economic growth for the current fiscal year from 6.1 percent to 5.9 percent. India's economy will still keep expanding at the quickest rate in the world.
When asked about the Reserve Bank of India's accommodative inflation targeting, Virmani said, “We should be more like the US Federal Reserve, which has an inflation target but also takes account of GDP.”
The central bank has been instructed by the government to maintain retail inflation based on the consumer price index (CPI) at 4% with a 2% tolerance on each side.
Early this month, the central bank chose to stop after implementing six consecutive increases in the benchmark short-term loan rate (repo) since May 2022 to control excessive inflation. Since May 2022, rates have increased by a total of 250 basis points.
When asked whether India could achieve the same economic success that has made China a major player in the international economy and a major power, Virmani said that he did not believe any other nation would now be permitted to adopt the unfair trade practices that China had.
He said, “And my estimate is that if it weren't for these unfair trade policies, roughly one-third of China's growth would not have occurred.”
India doesn't have an asymmetrical trade strategy, according to Virmani, and can expand at a rate of 6.5-7% without it.