Categories: Economy

Economic Survey 2022-23, Indian economy to grow 6.5% next year

Economic Survey 2022-23

Finance Minister Nirmala Sitharaman presented the economy survey to Parliament. According to the economic survey, India’s economy will expand by 6.5 percent in 2023–2024 as opposed to 7 percent in the current fiscal year and 8.7 percent in 2021–2022. The Economic Survey 2022-23 is primarily the government’s assessment of the economy’s performance over the previous year.

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Economic Survey 2022-23: Key Points

● The government stated in its Economic Survey 2022-23 report that their baseline scenario for growth for 2023–2024 was 6.5%, with nominal growth—which takes inflation into account—predicted at 11%.
● Since the COVID-19 pandemic, India’s economy has recovered, but the crisis in Russia and Ukraine has increased inflationary pressures and forced central banks, including India’s, to change their ultra-loose monetary policy.
● The Economic Survey 2022-23 report found that even though inflation remained over the central bank’s target in 2022–2023, the rate of price increases was neither too high nor too low to discourage private consumption or hamper investment.

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Economic Survey Report 2022-23 Highlights:

● India’s economy will expand by 6.5 percent in 2023–2024 compared to 7 percent this fiscal year and 8.7 percent in 2021–2022
● India will continue to be the world’s fastest-growing major economy, according to the Economic Survey 2022-23.
● To be 11 percent in nominal terms in the upcoming fiscal year
● Private consumption, more capital expenditures, a stronger corporate balance sheet, increased financing to small enterprises, and the return of migrant workers to cities all contributed to growth.
● India is the world’s third-largest economy by purchasing power parity and the fifth-largest by exchange rate.
● The economy has almost “recouped” what it lost, “renewed,” and “renergised,” what had stalled during the pandemic and since the conflict in Europe.
● Real GDP growth will be between 6 and 6.8% next fiscal year, depending on regional and international political and economic developments, according to the Economic Survey 2022-23.
● India recovered from the epidemic quite quickly, and growth will be underpinned by strong domestic demand and an increase in capital investment in the upcoming fiscal year.
● The RBI expects inflation to be 6.8 percent this fiscal year, which is higher than the upper goal limit but not high enough to discourage private consumption or too low to reduce incentives for investing.
● Long-term inflation may make borrowing costs “higher for longer” and lengthen the tightening cycle.
● With the possibility of additional interest rate increases by the US Fed, the challenge to the rupee’s depreciation continues.
● Given the elevated global commodity prices and the continued strength of the economic growth momentum, the CAD may continue to widen.
● The rupee may see devaluation pressure if CAD widens much more, according to the Economic Survey 2022-23.
● An overall manageable external environment
● India has enough foreign exchange reserves to cover CAD and participate in the FX market to control currency volatility.
● elevated potential risks to the outlook for the world economy as a result of continuing inflation in advanced economies and indications of additional rate hikes by central banks
● In comparison to a number of developed countries, inflation did not “climb too much above” the acceptable limit.
● The increase in growth rates in 2021–22 and the first half of the current fiscal year caused production processes to change from “mild acceleration” to “cruise mode,” although export growth has since decreased.
● The second part of this year saw a loss of export stimulus due to slowing global GDP and declining worldwide trade.
● Plans like PM KISAN and PM Garib Kalyan Yojana made a big difference in reducing poverty.
● Drive economic growth through credit distribution, the capital investment cycle, the expansion of public digital platforms, and programmes like PLI, the National Logistics Policy, and PM Gati Shakti.
● On the strength of low inflation and moderate lending costs, bank credit growth is anticipated to be robust in FY24.
● Over 30.5 percent of credit growth went to small firms between January and November of 2022.
● After the release of pent-up demand and a drop in inventory, housing prices have firmed up.
● In the current fiscal year’s April to November, Central Government Capex increased by 63.4 percent.
● India’s economic resilience has enabled it to meet the task of reducing external imbalances brought on by the crisis between Russia and Ukraine while maintaining development momentum.
● Unaffected by the FPI pullout, the stock market saw positive reruns in calendar year 2022.
● India fared better than other economies in overcoming an unprecedented mix of difficulties.
● GST paid by small firms has increased and currently exceeds pre-pandemic levels after declining in FY21, demonstrating the success of focused government assistance, according to the Economic Survey 2022-23.
● In the current fiscal year, private consumption and capital formation-led economic growth have contributed to job creation; urban employment rates have fallen while Employee Provident Fund registrations have risen.