India's FY26 Growth Projections: Realistic but Challenges Remain | EY's Srivastava

New Delhi, Jan 31 (PTI) The 6.3-6.8 per cent growth projections in FY26 are realistic and appropriate policies can improve it further, D K Srivastava, Member, Advisory Council to the 16th Finance Commission, said on Friday.

Srivastava, who is the Chief Policy Advisor in EY, also said policymakers will face tough challenges to achieve the goal of Viksit Bharat by 2047 as it would require 8 per cent annual growth for up to 2 decades.

In an interview with PTI, Srivastava said the GDP growth projections made in the Economic Survey 2024-25 are "realistic".

The range of GDP growth is lower than last year. The survey has projected 6.3-6.8 per cent growth for FY26 against 6.5-7 per cent projected for FY25.

"If you compare the mid-points of the range of GDP growth projections for two years, there is a slight deceleration that the 2024-25 Survey is hinting. The midpoint for FY25 growth was 6.75 per cent, while for FY26, it is 6.55 per cent. There is a slight downward trend and with appropriate policies, these can be improved further," Srivastava said.

As per advance estimates of the NSO, the growth in the current fiscal is estimated at 6.4 per cent -- the lowest in four years.

Srivastava said the Economic Survey 2024-25 takes a long-term view of Viksit Bharat and states that the required GDP growth is 8 per cent.

"That is going to be a major challenge for policymakers because so far we have been maintaining just a little less than 7 per cent. For 1-2 years, there have been exceptions where we have crossed 8 per cent. But on a sustainable basis maintaining an 8 per cent growth will call for a nominal savings rate of 35 per cent, against 31 per cent currently. That savings rate appears difficult," Srivastava said.

He said India must focus on new technologies and new sectors like AI, Biotech, and ocean-related technologies where excess capacities do not exist.

"In those sectors, India can make a leap in terms of capacities which is not matched by the rest of the world. Therefore, a carefully crafted industrial and manufacturing policy can still enable India to move towards that (8 per cent growth) target," Srivastava said.