Chief Economic Adviser V. Anantha Nageswaran on Wednesday said India's growth is expected to be in the range of 7-8.5% given the global uncertainties.
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The International Monetary Fund recently lowered its growth forecast to 8.2% which is higher than 7.2% by the Reserve Bank of India.
"The range of outcomes is fairly wide. Wider than it could ever be and that makes decision making all the more hazardous. Lots of luck is needed to get it right," he said at an event here.
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As per the Economic Survey, India's economy is expected to grow by 8-8.5% in the fiscal beginning April 1.
The CEA said he had a conversation this afternoon with Fitch Ratings which has projected a growth rate of 8.5% for India.
Although they have a negative outlook on India with BBB minus rating, they do have a forecast of 8.5% real GDP growth for 2022-23, he added.
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"So, the reality may in fact somewhere between this range of 7-8.5%. We will take that in the current circumstances because the uncertainty as to how long this current conflict in Europe with last and the impact it would have not only on the price of hydrocarbon fuel, but also on fertilizer prices, food prices, etc, is quite difficult to guess at this point," he said.
There are spillover effects likely to come from the monetary policy tightening by central banks in the advanced countries as well, he added.
The RBI on Wednesday after an unscheduled MPC meeting hiked the benchmark lending rate by 40 basis points (bps) to 4.40% to contain inflation that has remained stubbornly above the target of 6% for the last three months.
The Monetary Policy Committee (MPC) headed by RBI Governor Shaktikanta Das also raised the amount of deposits banks are required to maintain a cash reserve by 50 bps to 4.5% to suck out ₹87,000 crore of liquidity from the banking system.
This is the first-rate hike since August 2018 and the first instance of the MPC making an unscheduled increase in the repo rate.
V. Anantha Nageswaran | Photo Credit: SUSHIL KUMAR VERMA