New Delhi
India will continue to remain the fastest growing major economy in the world in the next financial year with the official growth estimate likely to be between 6% and 6.8% , two people aware of the development said. The Economic Survey, to be presented on Tuesday, will put forth an estimate for India’s growth in 2023-24.
At the top end, the estimate is higher than the latest estimates of the International Monetary Fund (IMF) and the World Bank, the two added , requesting anonymity. The two multilateral agencies have projected a real growth rate of 6.1% and 6.6% respectively for FY24.
Experts say global headwinds may affect India’s growth prospects mainly because of contraction in exports due to falling demand in major markets and high energy costs. EY India’s chief policy adviser DK Srivastava said growth in FY24 is expected to be in the range of 6-6.5% mainly because India’s exports are declining due to shrinking global demand. “Net exports have negative contribution in FY23, which might continue in FY24, and may accentuate because of general global recession.”
But lower oil prices could help, he added.
“It is a saving grace that global crude oil prices have softened to some extent. If this continues, it may help to lift up the growth rate, provided the fiscal authority gives a strong stimulus.”
That may require the budget to balance the imperative to cut the fiscal deficit from the budgeted 6.4% in 2022-23 with the need to support growth, Srivastava explained.
Despite the challenges, the consensus opinion is that India is better off than most other economies.
“India’s progress over the past decade has been quite remarkable. The economy’s position has gone from the tenth largest ten years ago to the fifth largest today. India has been the fastest growing major economy for the third year in a row — a bright spot in a global economy facing strong recessionary impulses, multi-decade high inflation, record levels of public debt and the squeezing of real household incomes,” Tata Sons chairman N. Chandrasekaran said in the forward of ‘INDIA@100: Realizing the potential of a US$26 trillion economy’, which was released on the side-lines of the World Economic Forum at Davos.
The first advance estimate by India’s National Statistical Office puts growth in 2022-23 at 7%.
