Even though the Indian Economy slowed down to 5.4 per cent in the second quarter, it will grow in the range of 6.5 to 7 per cent this fiscal, voiced Chief Economic Advisor (CEA) Anantha Nageswaran on Thursday.

Speaking at the Global Economic Policy Forum 2024, organised by the Ministry of Finance and the Confederation of Indian Industry (CII), Nageswaran said, “We are on track for robust growth, but enduring global uncertainties pose significant challenges that will shape the trend growth in the years ahead.”

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The CEA attributed the deceleration in GDP growth to factors that could either be temporary or indicative of deeper issues.

He stressed on the need to double down on domestic efforts to tackle the global uncertainties, and highlighted the importance of innovation, wage growth, and quality consciousness in driving sustainable economic growth.

“We must focus on making ‘Made in India’ synonymous with quality and R&D. Without growth, there are no resources to invest in climate change management.”

He also highlighted the global disruptions, and said the spike in energy costs has eroded European industrial competitiveness. “We must manage our energy transition carefully to avoid sacrificing economic growth in the name of sustainability.”

He also said India’s capital formation as a share of the GDP is expected to rise from 30.8 per cent to 35 per cent over the next five years, with the private sector increasingly deploying funds.

The CEA further said agriculture remains a key focus area. “Policy emphasis must make agriculture productive and resilient while ensuring water security and tailoring incentives appropriately,” he noted.

Recently, the Asian Development Bank (ADB) lowered India’s economic growth forecast to 6.5 per cent for the current financial year due to lower-than-expected growth in private investment and housing demand. Earlier it estimated the growth of 7 per cent.

S&P Global Ratings had said the Indian economy is set for resilient growth in 2025 and projected inflation pressure to recede which will lead to modest easing of the monetary policy by the RBI.

In its India outlook for 2025, S&P also retained India’s growth forecast for the current fiscal at 6.8 per cent, followed by 6.9 per cent growth in 2025-26.