The growth forecast reflects a tempered optimism compared to the more confident 7% projection earlier in the year. Nageswaran cited the increasingly polarized global landscape and elevated financial market valuations as factors contributing to the revised forecast. While the Indian economy remains on a solid growth trajectory, the Chief Economic Advisor pointed out that potential risks, including geopolitical tensions and financial market corrections, could pose challenges.
Agriculture remains a significant driver of growth, with the CEA highlighting its potential to not only ensure food security but also position India as a key global food exporter. The sector's growth could be further accelerated through policy interventions such as land consolidation and aligning incentives for allied services.
Nageswaran also noted the importance of job creation and skill development to sustain economic momentum. India needs to generate approximately 8 million non-farm jobs annually until 2030 to meet its developmental goals. The focus on skilling is shifting from merely increasing enrollment in higher education to improving learning outcomes, with progress being made in this area.
The CEA also addressed concerns about over-financialization of the economy, cautioning that financial innovations need to be paced appropriately to avoid potential pitfalls similar to those experienced during the Asian financial crisis.
While India’s economic outlook remains positive, the government is aware of the challenges ahead and is focusing on prudent policy measures to sustain growth in an increasingly complex global environment.