India on Tuesday predicted its economy to grow 6% to 6.8% in the next financial year starting April 1, down from 7% projected for the current year, as a global slowdown is likely to hurt its growth.
Chief Economic Adviser V Anantha Nageswaran said that India is expected to do well in this decade on the back of reforms introduced by the government.
Nageswaran also assured that the government has not given up hope of 8 per cent GDP growth.
Nageswaran released the Economic Survey 2022-23 on Tuesday, a day before Finance Minister Nirmala Sitharaman tables the Union Budget for 2023-24 on Wednesday.
“Recovery of the economy is complete; non-banking and corporate sectors now have healthy balance sheets, hence, we don't have to speak of pandemic recovery anymore, we have to look ahead to the next phase,” Nageswaran said.
He also said reforms of the last eight years mean India will perform better in this decade. The CEA claimed that the country’s economic survey this year is a clear reflection of what the IMF has pegged as economic growth of 6.8% in FY23, 6.1% for FY24, and 6.8% for FY25.
According to him, well-capitalised banks are ready and willing to lend, and corporates are financially stronger and willing to borrow.
“The credit-investment cycle is poised for an upturn in the third decade,” he said.
Nageswaran admitted that the pandemic interrupted the investment cycle as deleveraging was completed by the end of 2018. The core debt of the private sector as a share of GDP was down to 87.8 per cent in the June 2022 quarter, from 100.7 percent in March 2021 quarter.
Credit growth is picking up across different sectors. MSMEs, large industries, services, and non-food credit are growing at double-digit rates, said CEA Credit growth is picking up across different sectors, Nageswarn said.
Among sectors in private listed space, investments undertaken by companies in the first half of FY 2022-23 are higher than what it was in the first half of FY 2021-22, he pointed out.
As private sector investment kicks in, and the construction sector comes back to life with rural migrants getting back to urban employment opportunities, the employment scenario will pick up as it did in the first half of the decade, said the CEA.
Nageswaran said the digital infrastructure can help the hitherto excluded sections get a fair shot at accessing national and international markets.
He also spoke about ‘justified optimism’ about India's digital public infrastructure.
The Economic Survey 2022-23 is a stock-taking report for India's economy. It gives a bird's eye view of India's economy to people.