New Delhi, July 13: The Indian economy will grow around 7 per cent in the current fiscal year and is on track to maintain a similar growth rate for several years, NITI Aayog member Arvind Virmani said on Friday.
Virmani said there are new challenges facing the country and they will have to be dealt with.
“Indian economy will grow at 7 per cent plus minus point 0.5 per cent… I expect that we are on track to grow at 7 per cent for several years from today,” he told PTI in an interview.
Last month, the Reserve Bank of India (RBI) pegged the FY25 gross domestic product (GDP) growth rate at 7.2 per cent.
Responding to a question on the decline in private consumption expenditures in the last fiscal year, Virmani said it is actually recovering now.
“The effect of the pandemic was to draw down savings… and very different from previous financial shocks,” he said.
Explaining further, Virmani said it is like what he calls a double drought situation.
“We also had, of course, El Nino last year, but what the pandemic did was that it resulted in people having to draw down their savings… So, the obvious reaction is to rebuild your savings, which tend to reduce current consumption,” he noted.
If people were buying branded goods, they will buy less branded or ordinary goods and save part of that money, he said, explaining that this shows a slide in consumption.
Virmani said history shows that coalition partners can slow privatisation in states in which the regional ally is in power, but that is not a big issue.