Growth next year to be better than IMF projections: Chief Economic Adviser

V. Anantha Nageswaran said that fiscal policy and monetary policy are usually synchronised and counterbalance each other.

October 31, 2022 04:45 pm | Updated 04:45 pm IST - New Delhi

Chief Economic Advisor V. Anantha Nageswaran. File

Chief Economic Advisor V. Anantha Nageswaran. File | Photo Credit: The Hindu Businessline

Chief Economic Adviser V. Anantha Nageswaran on Monday said India is expected to clock better growth than IMF's projections next year aided by enhanced capital formation.

Recently, the International Monetary Fund (IMF) projected 6.8% real growth for this year and 6.1% for next year for India.

"I think in fact, the growth rates for the coming years may be slightly more, slightly better than what these numbers are, because I think there is a possibility that India's capital formation cycle will do better after one decade of retrenchment," he said.

India's public digital infrastructure has probably crossed an inflection point and that will also be contributing to both formalisation of the economy and therefore higher growth, he said.

So, he said, maybe there could be 0.5-0.8% addition to the 6% baseline numbers.

He also said that fiscal policy and monetary policy are usually synchronised and counterbalance each other.

On high debt-to-GDP ratio, he said, sustainability is not a concern and it may reduce with asset monetisation.

India can use asset monetisation proceeds to whittle down it's debt and that will help improve the credit rating, that can be the best fiscal stimulus we can provide, he added.

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