'No place as fascinating and interesting as India on its development journey'

Chief Economic Advisor V ANANTHA NAGESWARAN, in a fireside chat with Tamal Bandyopadhyay at the Business Standard BFSI summit, talks about issues ranging from the US election results and growth in gross domestic product (GDP) to agriculture and his experience of having a ringside view of the Indian economy. Edited excerpts:

- Chief Economic Advisor V ANANTHA NAGESWARAN

After the US election results, we have seen what has happened to the rupee. The dollar index is going up. How do you see the impact of the results on the financial sector?

It is too early to attribute what is happening entirely to the results. Some of these trends were in motion. We should not lay too much emphasis on the market reaction. I don't see any reason to be overly concerned, whether it is foreign direct investment or the currency movement.

Your FY25 GDP growth projection—between 6.5 and 7 per cent—has been conservative. The Reserve Bank of India (RBI) governor seems more bullish than you on growth, sticking to the 7.2 per cent projection. Are you thinking of increasing your growth estimate?

We are comfortable with this current range as our possible projection for this financial year. I would be happy if the RBI estimate turns out to be more accurate than ours. In the first five months of the year, capital expenditure was lower than in the previous year. I'm confident that in the seven months of the financial year (FY25) remaining (counting October) it will catch up briskly. It may end up being slightly higher than capex last financial year.

There haven't been many takers of your hypothesis of keeping food out of the inflation basket when the RBI takes a call on interest rates. Have you changed your mind?

The central bank should not be burdened with a target for one particular sizable component of inflation that is not directly in its control. It is not my point to say that we should be unconcerned about food inflation. But there are other instruments to deal with it. There were not too many takers for the hypothesis, and just as well. Reversing a framework that has been set in place may have its own cost. When food expenditure becomes somewhat an insignificant portion of our monthly household budgets, it becomes probably that much easier to talk about changes.