Shillong, April 30: Despite rising geopolitical tensions and high oil costs, the Indian economy would expand by about 6.5% this fiscal year, according to Arvind Virmani, a member of the NITI Aayog.
The banking crises in the US and Europe, according to Virmani, have no bearing on the Indian financial system.
“So, in the current fiscal year, I have lowered my India’s economic growth projection by 0.5% due to all the developments that have occurred in the past year.
“So it is 6.5 percent, again plus or minus 0.5 percent,” he said.
Due to a slowdown in consumption and difficult external conditions, the World Bank and the Asian Development Bank have forecasted a decrease in Indian economic growth between 6.3 and 6.4 percent.
The International Monetary Fund (IMF) has revised its earlier forecast for India’s economic growth for the current fiscal year from 6.1 percent to 5.9 percent. India’s economy will nonetheless keep expanding at the quickest rate in the world.
When asked about the Reserve Bank of India’s accommodative inflation targeting, Virmani responded, “We should be more like the US Federal Reserve, which has an inflation target but also takes account of GDP.”
The central bank has been instructed by the government to maintain retail inflation based on the consumer price index (CPI) at 4% with a 2% tolerance on each side.