On the sharp fall in gross domestic product (GDP) growth in the second quarter of the current financial year, Chief Economic Advisor (CEA) V Anantha Nageswaran said ”we should not throw the baby out with the bathwater”.

Speaking at the Assocham’s Bharat@100 Summit ‘Fuelling Bharat’s Global Rise’, he said, “In view of Q2 GDP of 5.4 per cent, we should not throw the baby out with the bathwater, as the underlying growth story remains intact.”

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The CEA argued that the drop in economic growth “should not be over interpreted as a spike in global uncertainty index”. He added that private consumption has held up and exports have improved in the challenging environment.

The CEA believed the global environment is not conducive for India. “India’s path to lower middle income to upper income is during the scenario when the relative periods of global peace are becoming scarce. Global environment is far from conducive for us, we have to pull all domestic levers for growth,” he said.

India also needs to integrate itself with China’s supply chain to unlock the global supply chain, which can provide a further boost to growth, he argued.

Further speaking on the GDP growth, he said that with pick-up in some sectors, achieving a GDP growth of 6.5 per cent to 7 per cent in FY25 is still feasible.

“To achieve 6.5 per cent GDP in FY25, we need 7 per cent real GDP growth in Q3 and Q4, which is doable with pickup in some areas,” the CEA said.

It is to be noted that as per the recent government data, India’s economic growth slowed down in the September quarter to a 7-quarter low of 5.4 per cent on contraction in mining growth, manufacturing and utility services.