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Journalism of Courage
The Economic Survey 2021-22 has projected the economy to grow at 8.0-8.5 per cent in 2022-23, thereby moderating the growth forecast from 9.2 per cent expansion for 2021-22 outlined by the National Statistical Office (NSO) in its first advance estimates of Gross Domestic Product (GDP).
Last year’s Survey had projected real GDP to record a 11 per cent growth in 2021-22, post a 7.3 per cent contraction in 2020-21. While this year’s growth comes on a low base year economic output, the expansion next year has to be seen from the recovery levels in economic output.
The Survey flags inflation as a concern while assessing the macroeconomic stability indicators and suggests that the Indian economy is “well- placed” to take on the challenges of 2022-23.
Finance Minister Nirmala Sitharaman on Monday tabled the Economic Survey 2021-22 in the Lok Sabha.
“Growth in 2022-23 will be supported by widespread vaccine coverage, gains from supply-side reforms and easing of regulations, robust export growth, and availability of fiscal space to ramp up capital spending. The year ahead is also well poised for a pick-up in private sector investment with the financial system in a good position to provide support to the revival of the economy,” it said.
The growth projection for the next year based on “the assumption that there will be no further debilitating pandemic related economic disruption, monsoon will be normal, withdrawal of global liquidity by major central banks will be broadly orderly and oil prices will be in the range of $70-$75/bbl,” the Survey said.
The Survey projection is comparable with the World Bank’s and Asian Development Bank’s latest forecasts of real GDP growth of 8.7 per cent and 7.5 per cent respectively for 2022-23. As per the IMF’s latest World Economic Outlook (WEO) growth projections released on 25th January, 2022, India’s real GDP is projected to grow at 9 per cent in both 2021-22 and 2022-23 and at 7.1 per cent in 2023-24.
It stressed the need to watch up for imported inflation. India’s Consumer Price Index inflation stood at 5.6 per cent in December 2021 but wholesale price inflation, however, has been running in double-digits. “Although this is partly due to base effects that will even out, India does need to be wary of imported inflation, especially from elevated global energy prices,” it said.
Last year’s Economic Survey had pitched for an expansionary fiscal policy in 2021-22 to boost growth and advised the government towards significant privatisation of state-owned companies. A privatisation push and review of the banking sector asset quality was recommended in last year’s survey.
