GST reforms, festive season may spur demand: CEA
The onset of the festive season and the proposed goods and services tax (GST) reforms could boost domestic demand in the coming quarters, chief economic advisor V Anantha Nageswaran said on Friday.
However, short-term risks to economic activity-especially exports and capital formation-persist due to uncertainties caused by the extra 50 per cent US tariff that came into effect on August 27, he said. Nevertheless, there would be adequate domestic consumption even during such times to encourage private players to keep investing, Nageswaran reckoned.
The CEA was briefing reporters after the GDP data showed a higher-than-expected 7.8 per cent expansion rate in the June quarter. Growth will remain within the targeted band of 6.3-6.8 per cent this fiscal as projected in the Economic Survey in January, he said, ruling out a revision just yet despite the US tariff woes.
It's too difficult to gauge the precise impact of the US tariff on the Indian economy yet, he said. But the government is viewing the tariff as an opportunity to move forward with domestic reforms, deregulation and the diversification of the export markets, he added.
The latest data showed that India did not just stay as the world's fastest-growing major economy but also widened the gap with others, he said. China had the next best growth rate of 5.2 per cent in the June quarter, followed by Indonesia (5.1 per cent), US (2.1 per cent), Japan and the UK (1.2 per cent each), and France (0.7 per cent).
