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Economic growth may reach 7.5% in FY20: Subramanian
Feb-15-2019

Chief Economic Adviser K V Subramanian has said that the economic growth is expected to accelerate to 7.5% in next financial year (FY20), from 7.2% projected for the current financial year (FY19). He mentioned ‘We have done the projections. All the external agencies and internally our estimates are also 7.5% (2019-20). The nominal rate we are expecting is 11.5% and inflation of about 4%.’

He further stated in the last four years the GDP growth rate has been 7.3% that was highest across all government since liberalisation. This growth rate has been achieved amidst very low inflation. He also added that the significant reduction in inflation came on account of setting up of Monetary Policy framework that mandates the RBI to keep it within a particular band. Prior to 2014, the average inflation was in excess of 10%. Monetary Policy Committee, the interest rate setting body, has been given objective of achieving the medium-term target for consumer price index (CPI) inflation of 4% within a band of +/- 2 per cent, while supporting growth.

Besides, on fiscal deficit, he said the deficit has been secularly coming down and India is on the glide path to achieving the target set under the Fiscal Responsibility and Budget Management (FRBM) Act. The Budget pegs fiscal deficit to be at 3.4% of the GDP for FY20.

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