India's annual pre-budget economic survey is likely to peg GDP growth at 6-6.8% for 2023-24, media reports suggest. This would be the slowest in three years. Nominal growth is likely to be forecast at 11% for 2023-24.
In the previous year's budget, the GDP was projected to grow by 8%- 8.5% in real terms.
An economic survey by Chief Economic Adviser V. Anantha Nageswaran will be tabled in the parliament on Tuesday by Finance Minister Nirmala Sitharaman, a day before she presents the budget for the next fiscal year.
The government survey is likely to project that growth is seen at 6.5% for 2023-24 under the baseline scenario, Reuters quoted a source as saying.
The Economic Survey is the government's review of how the economy fared in the past year.
India's economy has rebounded since the Covid-19 pandemic, but the Russia-Ukraine conflict has triggered inflationary pressures and forced central banks, including India's, to reverse the monetary policy adopted during the pandemic.
The survey will likely take note of above-target inflation in India, estimated by the central bank at 6.8% in 2022/23, but is likely to argue that the pace of price increases is not high enough to deter private consumption or low enough to weaken investment.
India's CAD was 4.4% of GDP in the July-September quarter, higher than 2.2% a quarter ago and 1.3% a year ago, as rising commodity prices and a weak rupee increased the trade gap.
Even growth of 6.5% could keep India among the fastest growing economies in the world, despite losing pace from an estimated 7% in the fiscal year that ends on March 31. It has grown at 8.7% in the previous year mainly due to pandemic-related distortions.
The survey will likely point to an improvement in employment conditions in India due to stronger consumption but add that a further pick-up in private investment is essential for job creation. The government's increased spending on infrastructure in the last two years should help, the document will argue.
Unemployment in India soared during the pandemic.
The government's economic research department will also likely point to improvement in the financial health of the Indian banking sector as a factor aiding economic growth.
Last year, the central theme of the Economic Survey was the 'Agile Approach', which put emphasis on India's economic response to the Covid-19 Pandemic shock. The preface of the Economic Survey 2022 stated that the "Agile approach" was based on feedback loops, real-time monitoring of actual outcomes, flexible responses, safety-net buffers, and so on.
Budget 2023 to be presented on Wednesday is the last fiscal projection of the Modi government in its second term with the next Lok Sabha election due in April-May of 2024.