India’s economic growth is expected to accelerate in the current fiscal year, supported by government reforms, increased public investment, and a potentially favorable monsoon season, according to Shaktikanta Das, secretary of the Department of Economic Affairs. Speaking in an interview, Das projected growth could reach as high as 7.75%, exceeding last year’s estimate of 7.6% for the fiscal year ending March 31, 2016.

Das highlighted several factors underpinning this optimism, including policy measures in agriculture and rural development, structural reforms such as the implementation of the goods and services tax (GST) and the bankruptcy code, and significant government spending on infrastructure. An above-average monsoon, following consecutive drought years, is also expected to bolster agricultural output and rural demand, which the government sees as key drivers of domestic growth.

Despite the positive domestic outlook, India continues to face headwinds from a sluggish global economy that has dampened exports. The International Monetary Fund (IMF) recently downgraded its global growth forecasts for 2016 and 2017 to 3.2% and 3.5%, respectively, reflecting persistent weaknesses in trade and investment worldwide. Nonetheless, the IMF anticipates India will remain one of the fastest-growing major economies, citing rising real incomes and buoyant domestic demand.

Finance Minister Arun Jaitley expressed concurrence with this view during the IMF annual meeting in Washington, D.C., noting India’s role as a “beacon of hope” amid global uncertainty. Jaitley emphasized that improved external demand coupled with a strong monsoon season could further accelerate economic expansion.

Reserve Bank of India Governor Raghuram Rajan offered a more measured perspective, acknowledging that while macroeconomic stability is improving and investment is gaining momentum, challenges remain. He described India’s current position as relatively advantageous compared to many other economies but cautioned against complacency. Rajan noted that the country still faces risks from potential shocks and structural vulnerabilities.

Key concerns flagged by policymakers include rising non-performing loans in the banking sector, elevated corporate leverage, and ongoing global trade pressures. Das acknowledged these risks but stressed that the government has identified the issues and undertaken policy measures to address them, suggesting that the financial sector’s health will not impede growth significantly in the near term.

With domestic investment and demand slated to be primary growth engines in 2016-17, India’s economic performance will hinge on the interplay of favorable weather, coherent policy implementation, and resilience amid external uncertainties.