With global agencies pegging India as a ‘shining star’ amid global turmoil, the Economic Survey presented in Parliament on Tuesday looks ahead to the medium term while concluding that the pandemic response and recovery phase is now over.
1. Survey sees economy growing a tad slower
GDP growth seen in a 6.1-6.8% range with a 6.5% base case
2. …but set to regain the status of fastest growing major economy as the world slows sharply
“The Economic Survey presents a comprehensive analysis of India’s growth trajectory including the global optimism towards our nation, focus on infra, growth in agriculture, industries and emphasis on futuristic sectors”
— PM Narendra Modi
3. Multiple drivers supporting 6.5% growth and lifting medium-term potential to 7-8%
Rebound in private consumption, buoyant services
Increase in capacity utilisation
Healthy corporate, bank balance sheets
Slowing inflation, recovery in credit cycle
Recovery in private sector investment
Limited risk from China’s Covid surge; normalising supply chains
Cessation of monetary tightening leading to return of capital flows
“#EconomicSurvey2023 reaffirms that a seasoned captain PM @narendramodi 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”
— Amit Shah
4. Some immediate risks
Recession in advanced economies
Ongoing monetary tightening in developed markets
Still higher -than-normal commodity prices and slowing exports
Currency may weaken if current account deficit widens
Weakness in markets, uncertain monsoon
5. Policy Prescription
Continue with fiscal prudence
Check on current account deficit
Continue vigil on inflation
Aggressive monetisation and privatisation
A critical minerals policy Incentivise states for reforms
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