Clipped from: https://www.thehindubusinessline.com/economy/gdp-growth-in-fy24-estimated-at-6-68-per-cent/article66453228.ece
Baseline growth lowest in three years, but India still fastest-growing economy in the world
Indian economy is estimated to grow at 6-6.8 per cent during fiscal year 2023-24 (FY24), Economic Survey tabled in the Lok Sabha on Tuesday said.
It has projected a baseline growth of 11 per cent in nominal terms and 6.5 per cent in real terms in FY24. GDP growth in FY23 is expected at 7 per cent and nominal growth at 15.4 per cent.
“India’s recovery from pandemic was relatively quick and growth in upcoming year will be supported by domestic demand and pick-up in capital investment. Aided by healthy financials, incipient signs of a new private sector capital formation cycle is visible,” it said.
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Baseline growth of 6.5 per cent is the lowest in three years. Still, this will make India the fastest growing economy in the world. GDP growth in FY22 was 8.7 per cent but mainly due to base effect while in FY 23 it is expected to be 7 per cent.
The survey said capital expenditure will be the growth driver. This expenditure for the Central Government increased by 63.4 per cent in the first eight months (April-November) of FY23.
The Survey has noted that the Reserve Bank of India has projected baseline inflation at 6.8 per cent in FY23. It is higher than the upper tolerance level of targeted inflation of 2-6 per cent.
The Survey also highlighted that the surge in export growth in FY22 and the first half of FY23 induced a shift in the gears of production.
The Survey said growth in FY24 will remain strong relative to most global economies, led by private consumption, a pick-up in lending by banks, and improved capital spending by corporations.
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The Survey pointed to an improvement in employment conditions in India due to stronger consumption but added 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, it said.