Economic Survey suggest India will live up to expectation of being a ‘bright spot’

New Delhi: Next financial year, FY 2023-24, will be a real test case for the Indian economy, as the weak base effect is gone, making it a challenging one for recording an impressive growth rate. The external factors, like global economic situation, US Fed rates, and geopolitical uncertainties may pile up further challenges, and so what will be tested is the resilience of the economy. In other words, how far India, the ‘bright spot’ of the world according to the latest IMF report, can manage to grow by insulating itself from external shocks will be proved in FY 2023-24.

The Economic Survey tabled in parliament on Tuesday has set a pragmatic agenda of achieving a growth rate of 6-6.8 (baseline 6.5) percent in real terms next year on a base of 7 percent (estimated) of the current year. Thus, the Survey has made it clear that as far as the current year is concerned it does not agree with the Reserve Bank of India’s downgrading the projection to 6.8 percent. Who predicted it correctly, GOI or RBI, will however come clear a few months later when current year’s final figures will be available. Meanwhile, it is certain that a growth rate of 6.5 percent in 2023-24 will live up to the expectation of IMF of

Whether it will be 7 or 6.8 percent, India will be one of the fastest growing big economies of the world. Over and above it, President Draupadi Murmu in her first inaugural address to the joint session of the parliament stressed on self-reliance, announcing that it is the moment for building India. All however did not enthuse the stock markets. At 11.15 this morning, when the President was addressing the session, the Sensex was at 59,219 , down by 281 points (0.47 percent, and the Nifty was at 17,578, down by 70.7 pints (0.4 percent). However, many experts felt it was the consequence of the Adani effect, and the situation will improve by tomorrow, the Budget day.

Finance Minister Nirmala Sitharaman tabled the economic survey in Parliament today, a day before presenting the Union Budget 2023. In the survey, which reviews how the economy has fared in the current financial year and presents the economic vision of the union government, it has been claimed that India has nearly ‘recouped’ what was lost, ‘renewed’ what had paused, and ‘re-energised’ what had slowed during the pandemic. Moreover, it has mentioned that the ‘multiple structural changes’ that have been implemented over the past few years is helping the economy, and has claimed that the private sector is repairing balance sheets.

The Economic survey was expected to deal with the immediate problems concerning the common man: Employment conditions, inflation, private investment scenario, Indian rupee, and so on. It did, and the picture that emerges is a mixed one. But overall it says India’s growth story remains intact, and it has recovered from Covid shocks rather quickly. It has mentioned that judging by purchasing power India is the third largest economy, and the growth will be demand driven.

However, there is no firm assurance on the inflation front, though it has been claimed that it will neither go much beyond the tolerance level, nor deter consumption or investment. The Survey seems satisfied that inflation has not crept too far like in various other countries. As far as the rupee is concerned, it will continue to come under pressure if the Current Account Deficit continues to widen. But the Survey has assured that our foreign exchange reserve is strong enough to finance CAD and help the ailing rupee through direct intervention. Again, on the employment front it has not given any rosy picture as private sector investment is sluggish. However the government may come up with its investment plans in the budget

The survey has pinned faith on energy and power, steel and so on for future growth. It expects the service sector to grow well. With 65 percent of the population living in rural India and 47 percent dependent on agriculture, the Survey says that thanks to various government policies the sector is witnessing ‘robust growth’ and assures that the government is committed to ‘transforming lives and livelihoods through proactive socio-economic inclusion, integration, and empowerment of rural India’.

Thus the indication is clear that India will live up to expectation of being a ‘bright spot’, but how far that will improve the common man’s life needs to be seen.

–INDIA NEWS STREAM