The Indian economy is projected to grow at around 6.5% in the current fiscal year, making it the fastest-growing major economy in the world, despite a moderate cut in growth projections by multilateral lending agencies such as the World Bank and the Asian Development Bank. Sanjeev Sanyal, a member of the Economic Advisory Council to the Prime Minister (EAC-PM), stated that India’s performance is ahead of any other comparable economy, even after taking into account the modest reduction in growth forecasts. The International Monetary Fund (IMF) also lowered its growth projection for India to 5.9% from 6.1%, yet India will continue to be the fastest-growing economy in the world.

Sanyal believes that India’s supply side is now capable of driving growth over 8% due to the numerous reform measures taken by the Modi government. However, given the current challenging external conditions and the rapid slowdown of the global economy, growth beyond 6.5% is unlikely as imports would dramatically go up at a time when global demand constrains the ability to push exports.

Sanyal also stated that India’s financial sector will not see any direct impact from the US and European banking crisis as the country has put in a lot of effort to clean up its banks and remove non-performing assets. Nonetheless, India needs to remain vigilant as economic shocks including financial shocks can have second-order impacts.

Regarding the Adani crisis, Sanyal believes that it will not complicate India’s infrastructure ambitions as no particular entity can explain the wide range of infrastructure being built. Private spending in infrastructure has been welcomed in certain areas, such as telecommunications, and there doesn’t seem to be any major shortage of interest.