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Panagariya Sees Indian Economy Growing At Least 7 Percent This Fiscal
Sixteenth Finance Commission Chairman Arvind Panagariya expects the Indian economy to grow by at least 7 percent in the current fiscal year, citing its resilience amid geopolitical tensions and disruptions from the West Asia conflict. His outlook is more optimistic than the Reserve Bank of India projection of 6.7 percent and is supported by recent quarterly growth of 7.8 percent.
By Finblage Editorial Desk
4:15 pm
10 August 2026
Sixteenth Finance Commission Chairman Arvind Panagariya expects India’s economy to grow by at least 7 percent in the current fiscal year, arguing that economic activity has remained resilient despite geopolitical tensions, supply chain disruptions and the impact of the West Asia conflict.
Panagariya said the Indian economy has been growing at around 7 percent or slightly higher and expects the momentum to continue. He also indicated that the Reserve Bank of India’s latest growth projection could prove conservative compared with his own assessment.
The RBI recently raised its economic growth projection for the current fiscal year to 6.7 percent from 6.6 percent. Panagariya said he would be comfortable forecasting growth of at least 7 percent, noting that economic growth estimates are frequently revised upwards as more data becomes available toward the end of a fiscal year.
His optimism is supported by the latest quarterly data, with India’s economy recording 7.8 percent growth in the most recent quarter despite disruptions linked to the West Asia conflict. Panagariya said the performance demonstrated that the economy had been able to withstand external shocks while maintaining its high growth trajectory.
India is currently projected by various multilateral institutions to remain among the fastest growing major economies, with estimates generally placing growth in the 6.5 percent to 7 percent range. The resilience of domestic economic activity has helped offset concerns arising from geopolitical tensions and global supply chain disruptions.
Panagariya also dismissed concerns that India could be heading towards a middle income trap, saying the economy’s current growth trajectory does not warrant such pessimism. He argued that maintaining growth of around 7 percent provides a strong foundation for continued economic development.
However, he cautioned that sustaining this growth momentum would require continued structural reforms, particularly at the state and urban levels. Strengthening reforms in these areas would be important for India to maintain high growth and improve its prospects of transitioning towards a high income economy.
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