A robust manufacturing sector could elevate India’s medium-term economic growth to 7.5 or 8 percent, surpassing the 7 percent forecast in the Economic Survey, according to Chief Economic Adviser V. Anantha Nageswaran. Nageswaran emphasized that a thriving manufacturing industry, boosting exports, could help lower the current account deficit and strengthen the rupee. He reassured that there are no alarming signals from the sector presently, citing India’s strong foreign exchange position and dispelling concerns about rupee devaluation.
Aiming to enhance exports for a current account surplus and a stronger rupee, Nageswaran stressed the importance of bolstering India’s manufacturing sector. He underlined the necessity for the industry to become competitive and export-oriented to receive protection, linking it to productivity and export performance. Nageswaran advocated for India to strive for “strategic resilience,” ensuring the country’s ability to withstand global economic disruptions while becoming an integral part of the global supply chain.
Highlighting the banking sector’s improved strength with low NPAs and a 29 percent year-on-year growth in credit to the commercial sector, Nageswaran pointed out India’s resilient domestic demand amid global uncertainties. He noted that strong consumption, supported by a favorable macroeconomic environment, including low inflation and stable employment, along with rising purchasing power, is driving economic growth. The steady rural consumption, buoyed by robust agricultural performance, and the improving urban consumption, aided by tax reforms, indicate a broad-based momentum in consumption demand.
