India’s economy to slow down in 2023-24. Survey reveals all

Following are the highlights of the Economic Survey 2022-23 tabled in Parliament on Tuesday:

Photograph: PTI Photo

• India’s economy to grow 6.5% in 2023-24, compared to 7% this fiscal and 8.7% in 2021-22

• India to remain the fastest growing major economy in the world

• GDP in nominal terms to be 11% in next fiscal

• Growth driven by private consumption, higher capex, strengthening corporate balance sheet, credit growth to small businesses and return of migrant workers to cities

• India third largest economy in PPP (purchasing power parity) terms, fifth largest in terms of exchange rate

• Economy has nearly “recouped” what was lost, “renewed” what had paused, and “renerengised” what had slowed during the pandemic and since the conflict in Europe

• Real GDP growth to be in the range of 6-6.8% next fiscal depending on global economic, political developments

• India’s recovery from the pandemic was relatively quick, growth next fiscal to be supported by solid domestic demand, pick up in capital investment

• RBI projection of 6.8% inflation this fiscal outside the upper target limit, not high enough to deter private consumption, also not too low to weaken inducement to invest

• Borrowing cost may remain ‘higher for longer’, entrenched inflation may prolong tightening cycle

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

• CAD may continue to widen as global commodity prices remain elevated, economic growth momentum stays strong

• If CAD widens further, rupee may come under depreciation pressure

• Overall external situation to remain manageable

• India has sufficient forex reserves to finance CAD and intervene in forex market to manage rupee volatility

• Elevated downside risks to global economic outlook as inflation persisting in advanced economies and hints of further rate hikes by central banks

• Inflation did not “creep too far above” tolerance range compared to several advanced nations

• The growth in exports has moderated in second half of current fiscal; the surge in growth rate in 2021-22 and first half of current fiscal led to production processes shifting gears from ‘mild acceleration’ to ‘cruise mode’

• Slowing world growth, shrinking global trade led to loss of export stimulus in the second half of current year

• Schemes like PM KISAN, PM Garib Kalyan Yojana significantly contributed to lessening impoverishment

• Credit disbursal, capital investment cycle, expansion of public digital platform and schemes like PLI, National Logitics Policy and PM Gati Shakti to drive economic growth

• Bank credit growth likely to be brisk in FY24 on back of benign inflation, moderate credit cost

• Credit growth to small businesses remarkably high at over 30.5% in January-November, 2022

• Housing prices firming up after release of pent-up demand, decline in inventories

• Central govt capex grew 63.4% in April-November of current fiscal

• India’s economic resilience has helped it withstand the challenge of mitigating external imbalances caused by the Russia-Ukraine conflict without losing growth momentum

• Stock market gave positive retruns in calendar year 2022 unfazed by FPI withdrawal

• India withstood extraordinary set of challenges better than most economies

• After a dip in FY21, GST paid by small businesses has been rising and now crossed pre-pandemic levels reflecting the effectiveness of targeted government intervention

• Private consumption, capital formation led economic growth in current fiscal has helped generate employment; urban employment rate declined, while Employee Provident Fund registration rose.