Indian economy fastest growing

Economic Survey

♦    India's economy is projected to grow at 6.5% in 2023-24 as compared to 7% this fiscal and 8.7% in 2021-22

♦    The Real GDP growth is expected to be in the range of 6-6.8% in the next fiscal.

♦    India has been called the third largest economy in PPP terms, and the fifth largest economy in terms of exchange rate.

♦    "Challenge to rupee depreciation persists with the likelihood of further interest rate hikes by the US Fed."

♦    The surge in growth rate in 2021-22 and in the first half of the current fiscal has also led to the production processes shifting gears from 'mild acceleration' to 'cruise mode.'

♦    The Bank credit growth is likely to be brisk in FY24 on the backdrop of benign inflation and moderate credit cost.

♦    The Current Account Deficit (CAD) may continue to widen as global, the commodity prices remain elevated on the backdrop of the Russia-Ukraine war.

♦    RBl's projection of 6.8% inflation for this fiscal, outside the upper target limit has been considered to not be high enough to deter private consumption. 

New Delhi: India's economy is projected to slow to 6-6.8 per cent in the fiscal year starting April - still remaining the fastest growing major economy in the world - as extraordinary challenges facing the globe will likely hurt exports, the Economic Survey said on Tuesday.

The projection of India's gross domestic product (GDP) growth is higher than the 6.1 per cent estimate of the International Monetary Fund (IMF) and compares with the survey's estimated 7 per cent expansion in the current fiscal year (April 2022 to March 2023) and 8.7 per cent in the previous year.

The survey that details the state of the economy was tabled in Parliament by Finance Minister Nirmala Sitharaman a day before she presents Union Budget 2023-24. "At least three shocks have hit the global economy since 2020," the report, prepared by Chief Economic Adviser V Anantha Nageswaran, said.

Starting with the pandemic-induced contraction of the global output, the Russian-Ukraine conflict last year led to a worldwide surge in inflation. And then, central banks across economies led by the US Federal Reserve responded with synchronised policy rate hikes to curb inflation. The rate hike by the US Fed drove capital into the US markets causing the US dollar to appreciate against most currencies. This led to the widening of the Current Account Deficits (CAD) and increased inflationary pressures in net importing economies like India.

"The Indian economy, however, appears to have moved on after its encounter with the pandemic, staging a full recovery in FY22 (April 2021 to March 2022) ahead of many nations and positioning itself to ascend to the pre-pandemic growth path in FY23," the survey said.