India’s GDP is likely to grow at 6.5 to 7 per cent in the current fiscal year amid global challenges which may impact exports, said Economic Survey 2023-24 tabled in Parliament on Monday.
The growth projected for 2024-25 is lower than the economic growth rate of 8.2 per cent estimated for the previous financial year.
The Reserve Bank has projected the GDP growth for the fiscal year ending March 2025 at 7.2 per cent.
Global agencies like IMF and ADB see India to grow at 7 per cent.
“...The Survey conservatively projects a real GDP growth of 6.5–7 per cent, with risks evenly balanced, cognizant of the fact that the market expectations are on the higher side,” said the document tabled by Finance Minister Nirmala Sitharaman in Parliament.
It said the domestic growth drivers have supported economic growth in 2023-24 despite uncertain global economic performance. Improved balance sheets will help the private sector cater to strong investment demand.
The Survey also added a note of caution saying “private capital formation after good growth in the last three years may turn slightly more cautious because of fears of cheaper imports from countries that have excess capacity”.
While merchandise exports are likely to increase with improving growth prospects in advance economies, services exports are also likely to witness a further uptick.
A normal rainfall forecast by the India Meteorological Department and the satisfactory spread of the southwest monsoon thus far are likely to improve the agriculture sector’s performance and support the revival of rural demand, it said. However, the monsoon season still has some way to go, the Survey said.
Prime Minister Narendra Modi on Monday said the Survey highlights the prevailing strengths of the economy and identifies areas for further growth and progress as “we move towards building a Viksit Bharat”.
Chief Economic Advisor V Anantha Nageswaran on Monday said a 7 per cent GDP growth rate, the upper end of the projection made in the Survey, is doable depending on monsoon and global financial risks.
The Economic Survey is an annual document presented by the Government ahead of the Union Budget to review the state of the economy.
The document also provides an overview of the short-to-medium-term prospects of the economy.
In a post on X, Modi said, “The Economic Survey highlights the prevailing strengths of our economy and also showcases the outcomes of the various reforms our Government has brought.” “It also identifies areas for further growth and progress as we move towards building a Viksit Bharat,” the Prime Minister said.
Nageswaran said, “We are not pessimistic. We actually are optimistic about growth. We are also mindful of the challenges with regard to progress of monsoon.”
The Economic Survey has been prepared by a team of economists led by Nageswaran. Some analysts have termed the growth projection in the Survey as conservative.
“We want to be prudent in projecting growth rate, that is why we have projected the country’s economic growth at 6.5 per cent to 7 per cent in FY24,” he said.
“While 7 per cent is eminently doable, there are some risk factors given the way the monsoon has shaped up and financial market risks are rising in the developed world with the spillover effects on India, and also the global geopolitics environment,” he said.
According to him, there is momentum in the economy and private capital expenditure has picked up. India’s external debt ratio is much lower compared to other emerging economies, the CEA said.
