Economic Survey: A Confident Appraisal
Linus tackles things head-on. He takes sides in his analysis and it fits excellently with our editorial policy. No 'maybe's' and 'allegedly' for him, only things in black and white.
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By Linus Garg
First publised on 2023-02-01 05:29:22
About the Author
Linus tackles things head-on. He takes sides in his analysis and it fits excellently with our editorial policy. No 'maybe's' and 'allegedly' for him, only things in black and white.
View all posts by this Author
The government presented the Economic Survey for 2022-23 on Tuesday, a day before Finance Minister Nirmala Sitharaman is to present the Union Budget for 2023-24 in Parliament. As per the survey, the economy is likely to grow anywhere between 6- 6.8% next year (whereas the IMF has predicted that it will grow at 6.1%). The margin is kept high as the government feels that global economic and political issues will have a big impact on how the economy performs going ahead. The survey said that the impact of inflation has been mild and will be within controllable limits. It also said that the Indian economy has recovered from the Covid disruption and is on track to perform well.
As per the survey, since the spread of Covid from China has been limited this time, supply chain disruptions on this count are also negligible and will improve the position. Also, since central banks of US and Europe have paused interest rate hikes, foreign funds (which were taking money out of India) are likely to return and invest here. Further, since chance of recession in advanced economies has become low, there is a likelihood of no further slowdown in exports from India. But China's opening up can queer the pitch.
But the survey pointed out that fiscal discipline on part of the government will help in keeping interest rates low and thus boost growth. It also pointed out that the current account deficit was widening but India had a comfortable foreign exchange reserves position and could ward off the fall of the rupee through market intervention.
The government debt to GDP ratio still remains very high at 57% although it has been brought down by 2%. Ideally it should be below 50%. The government has vowed to maintain fiscal discipline. On the positive side, though, the increased spending on capital expenditure is laudable. It was 16% 9up from 12-13% earlier) in 2021-22 and is to be extended to 19% next year. With buoyancy in tax collections the government should now focus on reducing public debt.
