Economic Survey 2022-23 is optimistic about the Indian economy with downside risks not getting proper focus in the analysis of the policymakers. Though it has projected India’s GDP growth at 6-6.8 percent for 2023-24, has also cautioned that even as India’s outlook remains bright, global economic prospects are weighed down by a combination of the unique set of challenges and would impart a few downside risks. The GDP of India will be around USD 3.5 trillion. In real terms, the economy is expected to grow at 7 percent for the year ending March 2023. This follows an 8.7 percent growth in the previous financial year. The cause of optimism seems to be the expectation of growth in domestic demand and a pick-up in Capital Expenditure. Further, it expects to gain from the demographic advantage and relies on annual nominal GDP growth potential to be around 10 percent to 12 percent on average in the coming years.
Well, it does also seem to be a bit too optimistic, at a time when several international and national organisations have projected the Indian economy to decelerate to as low as 5.7 percent of the GDP. Nevertheless, the Economic Survey hopes that fiscal parameters will continue to improve.
“The strong domestic consumption growth and investment revival are expected to keep industrial production humming,” it said. Among the risks is the fall of the rupee, which may come under pressure again. Challenges of the depreciating rupee persist with a likelihood of further increases in policy rates by the US Fed. Thus, the assertion by the Survey that the rupee is better performing than most other currencies cannot instill much hope of appreciation of the rupee. Strong domestic demand and high prices may raise import bills which would increase pressure on foreign reserves. Moreover, there are many ifs and buts, such as even FM Nirmala Sitharaman has said, if inflation declines in 2023-24, and if the real cost of credit does not rise, then credit growth is likely to be brisk, and thereby Indian Economy’s prospects are bright.
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Economic Survey believes in the widening of the CAD to continue as global commodity prices remain elevated and the growth momentum of the Indian economy would remain strong. “Slowing demand will likely push down global commodity prices and improve India’s CAD in 2023-24,” it stated. The Survey showcases infra push by the government. It states that 89,151 projects costing Rs 141.1 lakh crore are under different stages of implementation. However, it may be saddening to know that only 1009 projects worth Rs 5.5 lakh crore are completed. The data shows how the position of Capex has been disheartening. Nevertheless, the Economic Survey hopes that capes’ revival is on the cards. However, real hope is from the agriculture and service sectors. “Agriculture sector remains buoyant with 4.6 percent annual growth during the last six years,” it noted. What is missing in the survey though, is a clear direction in which way the BJP government is dealing with the issue of the generation of more jobs in the economy. For the last nine years, the government has been following a policy of jobless growth, and mostly, those affected by the pandemic have been left to fend for themselves. It was expected that a major drive for the generation of additional jobs will be launched but that expectation has not been fulfilled.
