From Our Bureau
NEW DELHI: The economic survey tabled in the Lok Sabha by Finance Minister Nirmala Sitharaman on the first day of Parliament’s budget for the financial year estimates 7% GDP growth in the year and suggests reforms to speed up the growth.
It said India remains the fastest griwubg major economy in the world. GDP in nominal terms has been projected at 11% in the next fiscal. RBI, however, projects 6.8% inflation this fiscal outside the upper target limit. The economic survey says it is “not high enough to deter private consumption, al;so need not too low to weaken inducement to invest.”
India’s economy is to grow 6.5% in 2023-24 compared to 7% this fiscal and 8.7% in 2021-22. The survey says “Real GDP growth to be in the range of 6-6.8% next fiscal depending on global economic, political developments.”
The survey reflects the state of India’s economy and presents detailed statistical data on different sectors and how they performed during the year gone by. It also highlights various government schemes and their outcome, helping to know the impact of such schemes and whether they should be continued or not.
Though presented in Parliament by Finance Minister Sitharaman, it is prepared by the Department of Economic Affairs under the guidance of Chief Economic Advisor V Anantha Nageswaran.
Recovering from pandemic-induced contraction, Russian-Ukraine conflict and inflation, Indian economy is staging a broad based recovery across sectors, positioning to ascend to the pre-pandemic growth path in FY23.
India is third largest economy in PPP (purchasing power parity) terms, fifth largest in terms of exchange rate
* Private consumption as a per cent of GDP stood at 58.5 per cent in Q2 of FY23, the highest among the second quarters of all the years since 2013-14, supported by a rebound in contact-intensive services such as trade, hotel and transport.
Growth driven by private consumption, higher capex, strengthening corporate balance sheet, credit growth to small businesses and return of migrant workers to cities.
Economy has nearly “recouped” what was lost, “renewed” what had paused, and “renerengised” what had slowed during the pandemic and since the conflict in Europe.
India’s recovery from the pandemic was relatively quick, growth next fiscal to be supported by solid domestic demand, pick up in capital investment.
RBI projection of 6.8 pc inflation this fiscal outside the upper target limit, not high enough to deter private consumption, also not too low to weaken inducement to invest.
Credit Growth:
Credit growth to the Micro, Small and Medium Enterprises (MSME) sector has been remarkably high, over 30.5 per cent, on average during Jan-Nov 2022.
Capital expenditure of the central government, which increased by 63.4 per cent in the first eight months of FY 23, was another growth driver of the Indian economy in the current year.
Rupee may come under pressure if Current Account Deficit widens. The Economic Survey cautions that the challenge of the depreciating rupee, although better performing than most other currencies, persists with the likelihood of further increases in policy rates by the US Fed.
