NITI Aayog's Virmani Revises FY25 GDP Growth Projection For India
ECONOMY & POLICY

NITI Aayog's Virmani Revises FY25 GDP Growth Projection For India

NITI Aayog member and renowned economist Arvind Virmani said he has revised his GDP growth projection for India on the lower side for FY25 due to rising global uncertainties and risks, particularly from the United States and China. Virmani, who had earlier predicted a GDP growth in the range of 6.5-7.5 per cent, adjusted the projection to 6.5-7 per cent now with high probability of it being sub-7 per cent, amidst heightened risk aversion stemming from global political and economic challenges. "My focus from the beginning of the year was 7 per cent plus-minus 0.5 per cent, which means 6.5-7.5 per cent. But now I am revising it to 6.5-7 per cent. The political uncertainties created by the US elections is much higher than I had anticipated," Virmani said. "The US election uncertainty has a domino effect, influencing Europe, China, and other regions, indirectly impacting India," he said on the sidelines of an interactive session with MCCI. He highlighted the significant slowdown in China's economy, noting its 'irrational' capacity-building approach despite reduced capacity utilisation. "China’s overcapacity, coupled with its slowing economy, has exacerbated global uncertainty and risk aversion, and may further affect India’s growth trajectory," he added. Despite these challenges, Virmani remained optimistic about India's long-term prospects. "If India sustains 6 per cent growth for the next 25 years, it is well-placed to become an upper-middle-income or even a high-income country, coming close to China," he said. Addressing the uneven distribution of investments across various states, Virmani said the NITI Aayog is working on benchmarks and indices to help states improve their investment climate, including Foreign Direct Investment (FDI) inflows. "Currently, only a few states attract the majority of investments. The Modi government recognises the crucial role of states and aims to provide actionable insights for others to catch up," he said. International institutions estimate GDP growth of India at 6.4-6.5 per cent.

NITI Aayog member and renowned economist Arvind Virmani said he has revised his GDP growth projection for India on the lower side for FY25 due to rising global uncertainties and risks, particularly from the United States and China. Virmani, who had earlier predicted a GDP growth in the range of 6.5-7.5 per cent, adjusted the projection to 6.5-7 per cent now with high probability of it being sub-7 per cent, amidst heightened risk aversion stemming from global political and economic challenges. My focus from the beginning of the year was 7 per cent plus-minus 0.5 per cent, which means 6.5-7.5 per cent. But now I am revising it to 6.5-7 per cent. The political uncertainties created by the US elections is much higher than I had anticipated, Virmani said. The US election uncertainty has a domino effect, influencing Europe, China, and other regions, indirectly impacting India, he said on the sidelines of an interactive session with MCCI. He highlighted the significant slowdown in China's economy, noting its 'irrational' capacity-building approach despite reduced capacity utilisation. China’s overcapacity, coupled with its slowing economy, has exacerbated global uncertainty and risk aversion, and may further affect India’s growth trajectory, he added. Despite these challenges, Virmani remained optimistic about India's long-term prospects. If India sustains 6 per cent growth for the next 25 years, it is well-placed to become an upper-middle-income or even a high-income country, coming close to China, he said. Addressing the uneven distribution of investments across various states, Virmani said the NITI Aayog is working on benchmarks and indices to help states improve their investment climate, including Foreign Direct Investment (FDI) inflows. Currently, only a few states attract the majority of investments. The Modi government recognises the crucial role of states and aims to provide actionable insights for others to catch up, he said. International institutions estimate GDP growth of India at 6.4-6.5 per cent.

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