Economic Resilience – The Kashmir Monitor
The Economic Survey 2022-23 was tabled in Parliament on Tuesday. The survey highlights how India’s economy has weathered all odds in challenging times. The document projects a baseline GDP growth of 6.5 per cent in real terms in FY24.
The estimate is roughly at par with estimates provided domestically by multilateral agencies such as the World Bank, IMF, ADB and the RBI. The survey also said that the economy is expected to grow at 7 per cent for the year ending March 2023. This follows a growth of 8.7 per cent in the previous financial year.
Despite facing several challenges globally, India’s economy has shown tremendous resilience.
The top three challenges include COVID-19 related disruptions to the economies, the Russian-Ukraine conflict and its adverse impact as well as supply chain disruptions, mainly food, fuel and fertilizers and the central banks of the economies led by the Federal Reserve which responding with the synchronous policy rate. The hike to curb inflation, appreciation of the US dollar and widening of current account deficit (CAD) in net importing economies.
However, despite the three shocks, agencies across the globe continue to project India as the fastest growing major economy at 6.5-7.0 per cent in FY23. The optimistic growth forecast stems from a number of positives, such as a rebound in private consumption that has boosted production. activity, high capital expenditure (capex), near-universal vaccination coverage, enabling people to spend on contact-based services such as restaurants, hotels, shopping malls and cinemas, as well as migrant workers in cities to work in construction Significant decline in housing market inventory, sites strengthening balance sheets of corporates, a well-capitalised public sector banks set to increase credit supply and credit growth to micro, small and medium enterprises (MSMEs) key Field to name people.
The survey also highlighted that inflation and monetary tightening have pushed up bond yields in all economies and resulted in outflow of equity capital from most economies around the world to the traditionally safe haven market of the US. The capital flight subsequently strengthened the US dollar against other currencies – the US dollar index strengthened by 16.1 percent between January and September 2022.
The resulting depreciation of other currencies is widening the CAD and adding to inflationary pressures in net importing economies. A major positive in the survey is that it revealed a significant improvement over 2015-16 in a range of indicators related to the quality of rural life, with most of the health indicators registering an impressive increase.
These result-oriented figures establish solid medium-driven progress in rural living standards, aided by a policy focus on infrastructure and efficient program implementation. To improve the quality of life in rural areas. It is expected that India’s economy will continue to grow to its potential in the medium and long term as well.