'Rate hikes not to hit pvt capex"

After presenting the Economic Survey for FY23, chief economic advisor CEA) VAnantha Nageswaran exuded confidence that private capex will show noticeable improvement in FY24 and asserted that elevated interest rates are unlikely to deter companies from investing. nan interview with FE’s Banikinkar Pattanayak and E Kumar Sharma, Nageswaran discounted undue fears of fiscal deficit and elevated debt burden, and stressed the need for peristing with reforms amid growing external headwinds. Edited excerpts:

On the Survey's FY24 growth projection of 6.5% being higher than IMF’s

When it comes to GDP forecasts, these are all within the relam of statistical deviations. The IMF has forecast a growth rate of 6.1% for India for FY24, some other agencies have predicted higher growth The World Bank has pegged it at 6.6%).We have also said that with the baseline growth rate of 6.5%, downside risks are dominating. I don't thinkin an estimate like GDP, which can be subject to so many extraneous circumstances,we should be worried about the difference of a few basis points.

On expected further pick-up in private investments

In ten out of ten sectors that we analysed, based on quarterly earnings data of companies, the private capex in the first half of FY23 was running higher than a year before. So, we feel this trend will continue in FY24 as well).

On fixed investment rate returning to as much as 33% of GDP

The gross fixed capital formation today stands at about 30% of GDP. It suffered in the last decade because of the balance sheet stress, and after this was fixed in the financial and corporate sectors,we faced multiple shocks the pan-