India has enough fiscal space to withstand the shock unleashed by the West Asia war and the country’s growth could still reach up to 7 per cent, chairman of economic advisory council to Prime Minister, said on Wednesday.
“Our macro fundamentals are good. Fiscal space is there. So, we can withstand the shock, which other countries may not,” S. Mahendra Dev, chairman EAC-PM said.
Addressing members of the Bharat Chamber of Commerce in Calcutta, India has been able to spend on capital expenditure to keep the growth momentum going and also on the targeted sections, he argued.
“If you see debt to GDP ratio is low. And fiscal deficit is low. Our current account deficit is 1.3 per cent of GDP,” he observed.
Dev concurred with the RBI’s forecast that India would grow by 6.9 per cent but expressed hope that the economy may expand by 7 per cent as well.
The EAC to PM said the rupee is likely to hover between ₹92=93 against the US dollar. “We need not worry. It happened (depreciated) due to the war. But I am hopeful, FDI will come back and then FIIs (too),” he added.
During the interaction, N.G. Khaitan, past president of the chamber, pointed out that the government should
encourage private capex, which has been slow in picking up.
Dev said the government is trying to improve ease of doing business to attract private capex, which is an important constituent if nation has to reach developed status by 2047.
