Economic Survey Forecasts 8-8.5% GDP Growth For FY23

The forecast of economic growth of 8 per cent to 8.5 per cent for the coming fiscal year (FY23), down from the estimated 9.2 per cent growth in the current year, according to the Economic Survey

Advance estimates suggest that the GVA of industry (including mining and construction) will rise by 11.8 per cent in 2021-22 after contracting by 7 per cent in 2020-21.

New Delhi: The Economic Survey, which was tabled on Parliament by Finance Minister Nirmala Sitharaman on Monday, projected a growth rate of 8 - 8.5 per cent in 2022-23. The survey document was presented ahead of the presentation of the Union Budget on February 1 (Tuesday).

The survey (2021-22) focusses on supply-side issues to improve the resilience of the economy. The forecast of economic growth of 8 per cent to 8.5 per cent for the coming fiscal year that starts in April (FY23), down from the estimated 9.2 per cent growth in the current year, according to the Economic Survey, tabled in Parliament on Monday.

Advance estimates suggest that the GVA of industry (including mining and construction) will rise by 11.8 per cent in 2021-22 after contracting by 7 per cent in 2020-21.

This implies that overall economic activity has recovered past the pre-pandemic levels. Almost all indicators show that the economic impact of the second wave in Q1 was much smaller than that experienced during the full lockdown phase in 2020-21, according to the survey.

Agriculture and allied sectors is expected to grow by 3.9 per cent in 2021-22 after growing 3.6 per cent in the previous year. Advance estimates suggest that the GVA of industry (including mining and construction) will rise by 11.8 per cent in 2021-22 after contracting by 7 per cent in 2020-21. This sector is estimated to grow by 8.2 per cent this financial year following last year’s 8.4 per cent contraction.

Despite the disruptions caused by the pandemic, India’s balance of payments remained in surplus throughout the past two years. This allowed the Reserve Bank of India to keep accumulating foreign exchange reserves (they stood at $634 billion on December 31, 2021). This is equivalent to 13.2 months of merchandise imports and is higher than the country’s external debt. The combination of high foreign exchange reserves, sustained foreign direct investment, and rising export earnings will provide an adequate buffer against possible global liquidity tapering in 2022-23.