The Indian economy doesn’t need “heroic assumptions” to meet the Viksit Bharat target. If real growth averages 7% a year over the coming decade, and US
inflation is about 3%, then the growth rate in dollar terms will be 10% a year, he estimated. The economy needs to expand at about 9.3% a year to achieve developed nation status by 2047, Chief Economic Adviser (CEA) V Anantha Nageswaran said in an opinion piece in Mint newspaper. CEA said if real growth averages 7% a year over the coming decade, and US inflation is about 3%, then the growth rate in dollar terms will be 10% a year. The economy needs to expand at about 9.3% a year to achieve developed nation status by 2047. Nageswaran went on referring to a Bloomberg News article which cited economists saying that at India’s current pace of growth, the economy would fail to meet Modi’s goal. He pointed out that the appropriate measure to focus on was the dollar-denominated growth rate, rather than the real growth rate. India’s economy expanded at an average annual rate of 8.8% in dollar terms between 2000 and 2024, compared with 6.3% when measured in inflation-adjusted terms, according to Nageswaran. Nageswaran said the economic impact of the West Asia conflict had so far remained contained, but risks continued. he said the crude oil prices had not risen as sharply as initially feared, partly because global demand, particularly from China, remained subdued. However, the possibility of supply disruptions remains a risk and could keep energy prices elevated. Further on agriculture, CEA said several parts of the country had received adequate rainfall, while sowing remained only marginally below last year's level. CEA said inflation had increased from the unusually low base recorded last year, with food prices also rising. Headline inflation remained "well behaved" and within the central bank's target range, while wholesale inflation remained elevated. Nageswaran said the Reserve Bank of India was monitoring possible second-round effects before making decisions on monetary policy.
