Indian Economy Not Falling Behind, Likely To Grow At 6.5% In FY24: Sanjeev Sanyal

New Delhi: Indian economy will grow at around 6.5 percent in the current fiscal and will continue to be the fastest-growing major economy in the world, notwithstanding a modest cut in growth projections by multilateral lending agencies, Economic Advisory Council to the Prime Minister (EAC-PM) member Sanjeev Sanyal has said.

Sanyal further said that given the uncertainties in the global economy, India's performance is clearly far ahead of any other comparable economy. (Also Read: Future ChatGPT Models To Replace Many Human Tasks: Top AI Scientist)

"ADB (Asian Development Bank) and World Bank have only modestly reduced the (growth) forecast for this year. Even after this reduction, India will still be the fastest-growing major economy in the world," he told PTI. (Also Read: This AI-Based Smartphone App May Help You Quit Smoking)

Recently, the World Bank and the Asian Development Bank projected moderation in Indian economic growth between 6.3 percent and 6.4 percent due to a slowdown in consumption and challenging external conditions.

The International Monetary Fund (IMF) also lowered India's economic growth projection for the current fiscal to 5.9 percent from 6.1 percent earlier. Yet India will continue to be the fastest-growing economy in the world.

"It is not correct to say that we are falling behind, my own assessment is in line with what the Economic Survey published earlier this year that (India's economic) growth will be somewhere around six and a half percent range, which is a good performance under the current circumstances," Sanyal said.

Asked what it will take for India to grow at 8-9 percent per annum, he said that due to the large number of reform measures taken by the Modi government, India's supply side is now capable of driving growth over 8 percent.

"However, at a time when the rest of the world economy is rapidly slowing down, we will not be able to push growth too hard past the current level of six-and-a-half percent because the growth of 8 percent type level would mean that our imports will dramatically go up at a time when our ability to push exports would be constrained by global demand," he noted.

Therefore, Sanyal argued that from a macroeconomic stability perspective, India will have to be restrained in its expectations of what the country can do at this point in time.

"However, should the world find itself in a more conducive environment which will happen eventually, then India will be easily able to accelerate its growth performance," he said.

Replying to a question on the impact of the US and European banking crisis on India's financial sector, Sanyal said India's financial sector will not see any direct impact as the country has put in a lot of effort to clean up its banks and remove the non-performing assets (NPA's) using both capitalisation and the insolvency and bankruptcy process.