India’s economy to grow 6-6.8% in next fiscal, to be world’s fastest

Team News Riveting

New Delhi, January 31

India is projected to grow at a baseline rate of 6.5 per cent and a range of 6-6.8 per cent in the financial year 2023-24 (FY24) but will remain the fastest growing major economy in the world as it fared better in dealing with the extraordinary set of challenges the globe has faced.

The Economic Survey 2022-23 said on Tuesday that the global macroeconomic slowdown was the key risk factor to the forecast.

“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,” said the survey. The baseline nominal GDP growth is forecast at 11 per cent.

The survey said that growth was expected to be brisk in FY24 due to vigorous credit disbursal. The capital investment cycle is expected to unfold in India with the strengthening of the balance sheets of the corporate and banking sectors.

“Further support to economic growth will come from the expansion of public digital platforms and path-breaking measures such as PM GatiShakti, the National Logistics Policy, and the Production-Linked Incentive schemes to boost manufacturing output,” the report said.

The survey said India’s recovery from the pandemic was relatively quick, and growth in the upcoming year would be supported by solid domestic demand resulting in a pickup in capital investment.

“On the external front, risks to the current account balance stem from multiple sources. While commodity prices have retreated from record highs, they are still above pre-conflict levels. Strong domestic demand amidst high commodity prices will raise India’s total import bill and contribute to unfavourable developments in the current account balance,” it said.

“However, the scenario of subdued global growth presents two silver linings – oil prices will stay low, and India’s CAD will be better than currently projected. The overall external situation will remain manageable,” the survey said.

The report added that there has been an improvement in employment conditions in India due to stronger consumption but a pick-up in private investment is essential to creating more jobs.