India Has Enough Fiscal Space to Withstand West Asia War Shock: S Mahendra Dev

India Has Enough Fiscal Space to Withstand West Asia War Shock: S Mahendra Dev

India’s economy is well-positioned to absorb the impact of the ongoing West Asia conflict, thanks to its strong fiscal fundamentals, according to S Mahendra Dev, Chairman of the Economic Advisory Council to the Prime Minister (EAC-PM). He said the country has enough fiscal space to manage external shocks while maintaining growth momentum.

Dev agreed with the RBI’s FY27 growth projection of 6.9%, but remained optimistic that India could even achieve 7% growth, citing the economy’s inherent resilience and strong domestic demand. He highlighted that India has consistently delivered robust growth in recent years, strengthening confidence in the outlook.

On the currency front, Dev said the rupee is expected to remain in the ₹92–₹93 range against the US dollar. He noted that the recent depreciation was largely triggered by war-related global uncertainty, but added that the situation should stabilise as foreign direct investment (FDI) and foreign institutional inflows (FII) gradually return.

During the interaction, N.G. Khaitan, former president of the chamber, stressed the need to boost private capital expenditure, which has remained slow despite public investment support.

Responding to this, Dev said the government is actively working to improve the ease of doing business, which is crucial for reviving private capex. He emphasised that stronger private investment will be a key pillar in India’s journey toward becoming a developed nation by 2047.