Maha Kumbh Set to Propel India’s GDP Growth, Says CEA Nageswaran
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Synopsis
The recently held Maha Kumbh is projected to significantly enhance India’s GDP, aiding in reaching the 6.5% target for FY 2024-25, according to Chief Economic Advisor V. Anantha Nageswaran. The event is expected to stimulate consumption and economic activity.
Key Takeaways
- Maha Kumbh is expected to boost India's GDP.
- Projected GDP growth target of 6.5% for FY 2024-25.
- Significant increase in consumption expenditure anticipated.
- Fiscal deficit reached 74.5% of the annual target by January 2025.
- Long-term growth potential of India remains optimistic.
New Delhi, Feb 28 (NationPress) The recently concluded Maha Kumbh is anticipated to play a crucial role in enhancing India’s economic landscape, aiding the nation in reaching its ambitious target of 6.5 percent gross domestic product (GDP) for the financial year 2024-25, as stated by Chief Economic Advisor (CEA) V. Anantha Nageswaran on Friday.
During a media conference discussing the GDP figures for Q3 FY25, Nageswaran remarked that while quantifying the precise impact is challenging, the event is poised to significantly elevate consumption expenditure in the March quarter.
"With an estimated 50-60 crore individuals flocking to Prayagraj for the Maha Kumbh, the increase in spending could have a favorable effect on economic activity," he added.
India’s GDP growth rose to 6.2 percent in the third quarter (Q3) of FY25, compared to a revised 5.6 percent in the preceding quarter.
This growth was primarily driven by heightened rural consumption, supported by a beneficial monsoon, and increased government expenditure, according to data released by the government on February 28.
Nageswaran emphasized that the recovery in GDP growth during Q3 reaffirms India’s status as the fastest-growing major economy in the October-December period.
He also indicated that the anticipated GDP growth of 7.6 percent in the fourth quarter (Q4) of FY25 seems attainable, given the current economic momentum.
Concerning stock market volatility, the CEA attributed the fluctuations to profit-booking and outflows from foreign portfolio investors (FPI).
He highlighted that the Indian stock market is following global trends, notably the decline in US markets.
“The India stock market experienced almost parabolic growth between July 2024 and October 2024, and those extraordinary gains are now being corrected in the marketplace,” he stated.
“As of now, we observe a significant downturn in the US stock market, and the Indian market has mirrored that decline as well,” remarked CEA Nageswaran.
Nevertheless, he noted that seasoned market analysts, such as Chris Wood from Jefferies, remain optimistic about India’s long-term growth trajectory.
In the meantime, India's fiscal deficit reached 74.5 percent of the annual target by the end of January 2025, according to data from the Controller General of Accounts (CGA).
In absolute terms, the fiscal deficit amounted to Rs 11.69 lakh crore during the April-January period of FY25.
