His comments came hours after the Reserve Bank of India (RBI) cut its GDP growth forecast for FY27 to 6.6% from the 6.9% projected in April, citing higher energy and commodity prices along with persistent supply disruptions linked to the conflict in West Asia.
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Addressing reporters in New Delhi, Nageswaran said the government was not disputing the RBI’s revised projections given the uncertainty surrounding global conditions.
“We have no reason to second-guess them (RBI forecast) at this point, because there are both possibilities on the upside and on the downside with respect to the numbers that they have presented,” he said.
He said India’s growth momentum could strengthen again once external pressures ease, particularly if global conditions stabilise.
“So, even if the growth were to slip below 7 per cent as the RBI forecast suggests…macro stability measures and supply assurances will bring us back to a 7 per cent plus growth track in FY28 or as soon as external conditions improve,” he said.Nageswaran added that such a recovery scenario depended on a reversal of geopolitical and economic disruptions that emerged after late February.
“He further said it is a hope based on the assumption that the pre-February 28 condition is restored before FY28.”
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“Now, if these conditions continue, then we will revisit the estimate for the next financial year,” he added.
The chief economic adviser also indicated that nominal GDP growth in the current financial year could exceed the government’s Budget assumption of 10.1%, helped by rising retail inflation.
Talking about nominal GDP, he said, it is a fair estimate that it will overshoot the 10.1 per cent estimated in the Budget 2027, given the upward momentum of retail inflation.
“The good news is that the nominal GDP growth will be significantly higher than the number which the budget estimates used, which is 10.1 per cent for the current financial year,” he said.