According to Chief Economic Advisor Anantha Nageswaran, India’s economy is expected to grow between 6.5-7 per cent in the current financial year 2023-24, on the back of firm investments and rapid strides in digital transformation. He made these comments while speaking at the plenary session on ‘Mission USD 9 trillion Indian Economy by 2030′ organized by the Confederation of Indian Industry (CII) in Lucknow.
Dr. Nageswaran expressed his optimism about the medium-term growth prospects of the Indian economy and highlighted that the sound macroeconomic policies of the government, structural reforms such as GST, IBC, etc., infrastructure development projects, and the thrust on digitalisation have ensured that the Indian economy can grow for a longer period without running into an overheating situation.
The predictions are being made despite strong global headwinds and tighter domestic monetary policy tightening. Various international agencies have forecasted India to be one of the fastest-growing economies in 2023-24, supported by robust growth in private consumption and sustained pick-up in private investment.
Private consumption, which accounts for 60 per cent of the GDP, has surpassed its pre-pandemic trend in the third quarter of the last fiscal, contributed by the release of pent-up demand and recovery in rural demand. This trend is expected to continue with a lower inflation outlook due to easing commodity prices and a good harvest, which will substantially boost consumption spending.
Dr. Nageswaran also highlighted the increase in Minimum Support Price (MSP) for major crops and the rise in MNREGA wage rate will improve the financial security of rural households, leading to greater rural demand in the coming months. On Wednesday, the Cabinet Committee on Economic Affairs (CCEA) had approved the increase in MSP for kharif crops for the 2023-24 season. The increase was in the range of 5-10 per cent.
The Indian economy is in a state of autopilot and is bouncing back impressively after the pandemic, and Dr. Nageswaran hopes that the 2022-23 GDP numbers could be revised upwards in the subsequent revisions. He further added that between now and 2030, based on what has been done so far without even assuming that further reforms will be done, India has the potential to grow steadily between 6.5-7.0 per cent, and if additional reforms such as skilling, factor market reforms, and others are added, India can achieve growth rates of 7.0-7.5 per cent and possibly even 8 per cent.
