India’s Growth Rate Will Be Above 7.5% This FY: Former CEA

New Delhi: Former Chief Economic Adviser (CEA) Arvind Virmani on Sunday said that India’s economic growth seems to be back on the recovery path and the country will witness a 7.5%-plus growth rate this fiscal year. He further stated that the US-China tariff war will provide India an opportunity to increase its exports to the U.S.

Virmani added that the main risk to macro stability is politically-driven government consumption spending at the cost of investment and fiscal prudence. If this is curtailed, the country will be back on a 7.5%-plus growth track this fiscal. However, the rise in oil prices due to geo-political factors like sanctions on Iran by the U.S. is definitely a concern for the Indian economy.

The economist further stated that the U.S.-China tariff war will have some short term disruptive effects on the global economy. But it will provide India a golden opportunity to increase its exports to the U.S. besides attracting labour-intensive elements of the global supply chain unsettled by the tariff war.

The former CEA went on to add that populist expenditure prior to the elections must be kept modest and it should not disturb the trend in fiscal responsibility which may otherwise lead to an undesirable fiscal slippage.

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