Economic Survey: Indian economy projected to grow at 8-8.5 pct during next fiscal

The projected figure is down from the estimated 9.2 percent growth in the current fiscal year.

A day ahead of the Union Budget, Finance Minister Nirmala Sitharaman presented the Survey which contains an in-depth analysis of the Indian economy, challenges faced by it, sectoral trends, statistics and growth projection.

The Survey said that growth in 2022-23 will be supported by widespread vaccine coverage, gains from supply-side reforms and easing of regulations, robust export growth, and availability of fiscal space to ramp up capital spending.

"The year ahead is also well poised for a pick-up in private sector investment with the financial system in a good position to provide support to the revival of the economy. Thus, India's GDP is projected to grow in real terms by 8.0-8.5 per cent in 2022-23," the Survey said.

The Gross Domestic Product or GDP is the broadest measure of value of all goods and services produced in the country.

The Survey noted that the growth projection for the coming fiscal is based on the assumption that there will be no further debilitating pandemic related economic disruption, monsoon will be normal, withdrawal of global liquidity by major central banks will be broadly orderly, oil prices will be in the range of $70-75/bbl, and global supply chain disruptions will steadily ease over the course of the year.

The growth projection for 2022-23 has come in the midst of receding wave of Covid infections and several macro-economic indicators showing recovery largely on track.

The growth pegged by the Survey for FY23 is comparable with the World Bank's and Asian Development Bank's latest forecasts of real GDP growth of 8.7 per cent and 7.5 per cent respectively.

As per the IMF's latest World Economic Outlook (WEO) growth projections released on 25th January, 2022, India's real GDP is projected to grow at 9 per cent in both 2021-22 and 2022-23 and at 7.1 per cent in 2023-24.

"This projects India as the fastest growing major economy in the world in all these three years," the Survey noted.

The Indian economy is estimated to grow by 9.2 per cent in real terms in 2021-22 (as per the First Advance Estimates), after a contraction of 7.3 per cent in 2020-21.

The Survey has on many occasions in the past predicted growth which has been at variance with actual growth but still it is one of the most keenly watched numbers in the document. It had estimated the economy to grow at 11 per cent in the financial year 2021-22 but it is unlikely to be anywhere close to the actual figure.

Govt working for farmers’ welfare: President Ram Nath Kovind in address to Parliament

Emergence of Omicron towards the end of the 2021 and the subsequent restrictions imposed by states to contain the virus spread impacted the growth momentum especially of contact-intensive sectors of the economy.

Many economists and policy-watchers have suggested boosting demand in the economy to achieve higher GDP growth.

"Except for this Omicron, the manufacturing sector has already taken off. If you see the growth rate in Advance Estimate, it is clearly a sharp recovery across the sectors. It's only the service sector which is a contact-intensive sector that is taking a little time," N.R. Bhanumurthy, senior economist and Vice-chancellor, B.R. Ambedkar Economics University told UNI.

He said that there is recovery in demand but it is more from the external sector compared to the domestic sector and suggested to focus on domestic demand by creating more employment opportunities.

(With UNI inputs)