Union Home Minister Amit Shah on Tuesday (January 31) said growth and optimism in all sectors in the Economic Survey 2023 show that India is set to emerge as a global superpower. Shah made the statement through a tweet, lauding Prime Minister Narendra Modi’s vision and plan behind the growth at a time when the world is suffering a slowdown. "Economic Survey 2023 reaffirms that a seasoned captain PM Narendra Modi has smoothly navigated the economy through the rocky waters of the pandemic. When the world is suffering a slowdown, growth and optimism in all sectors show that India is set to emerge as a global superpower," said Shah.
As per Economic Survey 2023, India is to witness Gross Domestic Product (GDP) growth of 6.0 percent to 6.8 percent in 2023-24, depending on the trajectory of economic and political developments globally.
Also read: Home Minister Amit Shah Likely to Hold Rallies in Tripura on February 6 and 12
The optimistic growth forecasts stem from a number of positives like the rebound of private consumption giving a boost to production activity, higher Capital Expenditure (Capex), near-universal vaccination coverage enabling people to spend on contact-based services, such as restaurants, hotels, shopping malls, and cinemas, as well as the return of migrant workers to cities to work in construction sites leading to a significant decline in housing market inventory, the strengthening of the balance sheets of the Corporates, well-capitalized public sector banks ready to increase the credit supply and the credit growth to the Micro, Small, and Medium Enterprises (MSME) sector to name the major ones.
Union Minister for Finance and Corporate Affairs Nirmala Sitharaman tabled the Economic Survey 2022-23 in Parliament on Tuesday (January 31), which projects a baseline GDP growth of 6.5 percent in real terms in the Financial Year (FY) 2024. The projection is broadly comparable to the estimates provided by multilateral agencies such as the World Bank, the International Monetary Fund (IMF), the Asian Development Bank (ADB), and the Reserve Bank of India, domestically.
It says growth is expected to be brisk in FY24 as a vigorous credit disbursal, and 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," says the Economic Survey.
The Survey says, 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. Despite the three shocks of Covid-19, the Russian-Ukraine conflict and the Central Banks across economies led by Federal Reserve responding with synchronized policy rate hikes to curb inflation, leading to an appreciation of the US Dollar and the widening of the Current Account Deficits (CAD) in net importing economies, agencies worldwide continue to project India as the fastest-growing major economy at 6.5-7.0 percent in FY23.
According to Survey, India's economic growth in FY23 has been principally led by private consumption and capital formation and they have helped generate employment as seen in the declining urban unemployment rate and the faster net registration in Employee Provident Fund.
Moreover, World’s second-largest vaccination drive involving more than 2 billion doses also served to lift consumer sentiments that may prolong the rebound in consumption. Still, private capex soon needs to take up the leadership role to put job creation on a fast track.
The Survey notes with optimism that the Indian economy appears to have moved on after its encounter with the pandemic, staging a full recovery in FY22 ahead of many nations and positioning itself to ascend to the pre-pandemic growth path in FY23. Yet in the current year, India has also faced the challenge of reining in inflation that the European strife accentuated.
Measures taken by the government and RBI, along with the easing of global commodity prices, have finally managed to bring retail inflation below the RBI upper tolerance target in November 2022.