Growth next year to be better than IMF projections: CEA

Chief Economic Adviser (CEA) V Anantha Nageswaranhas said that India is expected to clock better growth than IMF's projections next year

New Delhi: Chief Economic Adviser (CEA) V Anantha Nageswaran said on Monday that 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 percent real growth for this year and 6.1 percent for the 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.

Growth to be 0.5-0.8% higher than 6% baseline number: CEA

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

(With PTI inputs)

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