Chief Economic Advisor Anantha Nageswaran emphasized that India's inflation trajectory will be significantly influenced by crude oil price movements, particularly whether prices remain below the $100 per barrel threshold. According to reports from NDTV Profit, Nageswaran made these comments during a Ministry of Statistics and Programme Implementation press briefing, noting that evolving oil prices will need to be closely monitored. The statement comes after the Reserve Bank of India's monetary policy committee raised its FY27 CPI projection to 5.1% from the earlier estimate of 4.6%.
Despite India's currency in circulation hitting a record ₹42.54 lakh crore as of May 22, according to RBI data, ATM operators are warning of significant cash shortages. The Confederation of ATM Industry (CATMi) reported that operators received only 64% of their cash requirement in March and 57% in April, despite needing around ₹94,000 crore for replenishment in both months. Only about ₹61,000 crore was available in March and ₹54,000 crore in April, as reported by CATMi to the Indian Banks' Association. The challenge stems from rising operational costs including higher fuel prices, security expenses, maintenance, and wage costs, while ATM usage continues declining with transactions falling to 446.5 million in May from 498.4 million a year earlier.
The CEA projected that India's trade deficit is likely to widen in fiscal year 2027, following the trend from FY26. As reported by NDTV Profit, Nageswaran backed the RBI's decision to reduce GDP growth estimates to 6.6% for FY27, while highlighting that nominal GDP growth for FY27 could be significantly higher than the budget estimate of 10.1%. He noted that while global uncertainty continues to impact capital flow dynamics, India's growth outlook remains resilient, and if growth were to slip below 7% due to external factors, government policies and reforms would help restore the 7% growth trajectory in FY28.
Nageswaran flagged emerging supply-side price pressures, particularly in wholesale inflation, indicating that rising input costs could begin to influence broader price trends in the economy. According to NDTV Profit, he noted that Brent crude prices, which had taken a breather in the last two days, have edged upwards again, though they remain well below the crucial $100 per barrel mark. The CEA's comments come as India recorded a 7.8% GDP growth rate in the January-March quarter of FY26, slightly lower than the 8% growth in the preceding quarter but higher than analyst estimates of 7.3%.
