New Delhi, Oct 3 (IANS) India has managed global economic uncertainties far better than expected, maintaining strong growth momentum alongside stable inflation despite escalating geopolitical tensions, 16th Finance Commission Chairman Arvind Panagariya said on Saturday.
Speaking to IANS on the sidelines of the 5th Kautilya Economic Conclave 2026 here, Panagariya expressed confidence that the Indian economy would continue to expand at an annual rate of 7-8 per cent over the medium term.
“I have long believed that the Indian economy will continue to grow at 7-8 per cent. When tensions in the Middle East escalated, I initially felt the impact on India could be quite severe, but the economy has performed remarkably well,” according to him.
According to Panagariya, the combination of stable inflation and sustained economic activity demonstrates India’s ability to navigate a challenging global environment.
“With inflation remaining under control and growth momentum continuing, it shows that India has managed global instability much better than many had anticipated,” he added.
Highlighting a key strength of the economy, Panagariya said the manufacturing sector has emerged as a major growth driver.
He noted that manufacturing growth has exceeded 10 per cent during the past three financial years, making it one of the strongest performances since Independence.
He further observed that businesses generally build safeguards against uncertainty, limiting the impact of global disruptions on the broader economy.
“Uncertainties may affect one or two sectors, but they do not necessarily impact the entire economy. Some sectors continue to perform well and provide support to overall growth,” Panagariya told IANS.
Earlier in the day while addressing the event, Finance Minister Nirmala Sitharaman said India has successfully navigated global uncertainties arising from the West Asia crisis while maintaining strong economic fundamentals.
She noted that real GDP expanded by 7.8 per cent in the first quarter of FY2026-27, while consumer price inflation stood at around 4.8 per cent in August. The current account deficit was contained at 0.5 per cent of GDP during the quarter.
FM Sitharaman added that since 2014, the government has worked to strengthen the institutional and economic capacities necessary for sustaining long-term growth and development.
–IANS
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