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”
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”
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
- Dismantle LIC – Licensing, Inspection & Compliance
- Education and skilling to match industry requirements