National Council for Applied Economic Research said that the Indian economy is showing resilience despite an unprecedented global environment but warned that the next financial year could be tougher and subject to uncertainty.
“The consensus estimate is that India will potentially grow at 7% next year we may see much slower growth (estimates released by various agencies suggest). But the caveat is that forecasts go wrong in either direction... we should take it with a fistful of salt,” the think tank’s Director General Poonam Gupta said while releasing the mid-year economic review.
For the moment, NCAER believes that high-frequency indicators — ranging from auto sales to tac collections, credit growth, PMI survey, and services exports — pointed to the economy being resilient to global headwinds, although it warned that there were some initial signs of weakening of export of goods and reversal of non-FDI capital flows.
While pointing to an improvement in capital expenditure, Poonam Gupta said that India’s tax and non-tax revenue grow slowly and cautioned that it may take some time for public debt to come down, limiting the fiscal space for the government. Gupta, who is also a member of the Economic Advisory Council to PM, said that the public debt and deficit left limited scope for the government finance priorities.
