India's FY23 GDP To Grow 8-8.5%, Says Economic Survey FY22

India's economy is expected to grow at 8-8.5 per cent in the next fiscal, said the Economic Survey 2021-22, which was presented in Parliament on Monday by Union Finance Minister Nirmala Sitharaman.

According to the Survey 2021-22, the building back of the economic momentum along with enhanced vaccination drive as well as the likely long-term benefits of supply-side reforms in the pipeline, the Indian economy is in a good position to witness GDP "growth of 8.0-8.5 per cent in 2022-23".

"Growth in 2022-23 will be supported by widespread vaccine coverage, gains from supply-side reforms and easing of regulations, robust export growth, and availability of fiscal space to ramp up capital spending."

"The year ahead is also well poised for a pick-up in private sector investment with the financial system in a good position to provide support to the revival of the economy."

Nonetheless, the survey pointed out that the global environment still remains uncertain. "At the time of writing, a new wave in the form of the Omicron variant was sweeping across the world, inflation had jumped up in most countries, and the cycle of liquidity withdrawal was being initiated by major central banks. Despite all the disruptions caused by the global pandemic, India's balance of payments remained in surplus throughout the last two years," it said.

This trend, it said, has allowed the Reserve Bank of India to keep accumulating foreign exchange reserves. "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."

The document cited that the growth projection is based on the assumption that there will be no further "debilitating pandemic related economic disruption, monsoon will be normal, withdrawal of global liquidity by major central banks will be broadly orderly, oil prices will be in the range of US$70-$75 per bbl, and global supply chain disruptions will steadily ease over the course of the year".

As per the document, the projection is comparable with the World Bank's and Asian Development Bank's latest forecasts of real GDP growth of 8.7 per cent and 7.5 per cent respectively for 2022-23.

Furthermore, according to the IMF's latest World Economic Outlook (WEO) growth projections, India's real GDP is projected to grow at 9 per cent in both 2021-22 and 2022-23 and at 7.1 per cent in 2023-24. 

"This projects India as the fastest growing major economy in the world in all these three years."