The current fiscal economic growth is expected to be 6.5-7 per cent, according to the Economic Survey for 2023–24, which is cautious given the previous fiscal year’s strong 8.2 percent GDP growth.
In the latest Economic Survey, the Finance Ministry went with a conservative growth projection for the fiscal year 2023–2024, though the market expected a marginally higher number.
“The 522-page report, overseen by Anantha Nageswaran, Chief Economic Advisor to the Finance Ministry, conservatively projects a real GDP growth of 6.5-7 percent, with risks evenly balanced, cognizant of the fact that the market expectations are on the higher side.”
At a news conference later in the afternoon, Anantha Nageswaran, CEA, provided an explanation for the decision to provide a cautious GDP growth prediction, saying, “We are not pessimistic.” In actuality, we have high hopes for expansion. We are also aware of the difficulties…The way the monsoon has developed and the expanding world financial markets provide such threats.
The world economy has grown even more divisive since January (interim budget), when we were more optimistic about a 7% growth rate. Valuations in the financial markets are now high. Considering that we still believe that 7% is achievable, we still wish to predict with a degree of caution rather than absolute caution. Being happily surprised is preferable to being let down. We are anticipating 6.5-7 percent because of this.
The Economic Survey, which has been tabled in the Lok Sabha by Nirmala Sitharaman on Monday pointed out that the economy is on growth path and informed that inflation is well managed. It also highlighted how the government, the continuation of the existing projects’ capital expenditures, and the new private investment have also led to the acceleration of the increase in capital formation. But the Survey cautioned that following three years of strong growth, private capital formation could become a little more cautious.
DELAYED ANTICIPATED EASING
On the occasion of India’s short term inflation expectation, the economic survey mentioned that it is moderate. For maintaining an inflation rate that is sustainable in the long run, however, a number of measures such as the acceleration of the agenda of the consumer price index with new weights and basket items has to be pondered further.
The RBI has maintained interest rates at current levels for “quite some time, and the anticipated easing has been delayed,” the Survey noted, despite the core inflation rate being about 3%. The RBI is keeping one eye on the US Fed and one on the withdrawal of accommodation.
AMRIT KAAL GROWTH STRATEGY
In the Survey, the Finance Ministry presented a growth plan for the Amrit Kaal that centers on six key areas: private investment; MSMEs’ growth; agriculture for growth; green shifts financing; employment education nexus; state capacity capability.
CENTRAL BANKS’ RATE CUTS
The Economic Survey mentions that supply chain disruptions have improved and global prices of commodities have gone down and thus less inflation has been observed in most economies. However, high service inflation remains the main cause of sticky core inflation.
