Setting the tone for the Union Budget 2022-2023, the Economic Survey 2022 projected the GDP forecast for FY23 at 8-8.5 per cent. The Advance estimates suggest that GDP will record an expansion of 9.2 per cent in 2021-22. The survey added that the level of real economic output will surpass the pre-COVID level of 2019-20. In the first advance growth estimate, the government projected the growth of 9.2 per cent in FY22. However, the GDP in FY21 contracted by 7.3 per cent.
“With the vaccination programme having covered the bulk of the population, economic momentum building back and 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.” the Economic Survey 2022 said.
Principal Economic Advisor, Sanjeev Sanyal while addressing media said, “India's GDP growth in 2022-23 is projected to grow between 8-8.5 per cent. Projected GDP growth of 8-8.5 per cent not taking into account any more severe waves of COVID-19. The GDP growth projection is based on the assumption that there will be no more debilitating pandemic related economic disruption, a normal monsoon, significant withdrawal of global liquidity, oil prices in range of $70-75." He added that global supply chain disruptions will ease over time.
The growth projection made by the Economic Survey 2022, however, is lesser than the growth forecast of 9 per cent for FY23 made by the International Monetary Fund.
“The 2022 Economic Survey infuses optimism for what lies ahead. The projection of 8-8.5 per cent GDP growth for fiscal 2022-23 will be led by supply-side reforms and easing of regulations. The survey also indicates that consumption is growing and inching closer to the pre-pandemic levels. Total consumption is estimated to have grown by 7.0 per cent in 2021-22 with a significant boost from government spending.
The Survey spells out that rising capital expenditure by the government on infrastructure and an uptick in the housing cycle has been responsible for reviving the construction sector,” said Ramesh Nair, CEO, India and Managing Director, Market Development, Asia, Colliers.
On the other hand, India Ratings and Research expects India’s gross domestic product (GDP) to grow at 7.6 per cent on-year in FY23. But ICRA in its report said that the Indian economy is expected to maintain real GDP growth of 9 per cent both in FY22 and in FY23, amid the uncertainty triggered by the Omicron variant of the COVID-19 virus.
A well known economist, Arun Kumar throwing light on the growth projection in the economic survey, said, "I don’t go by the growth projection of 8.0-8.5 per cent in FY23 as projected by the Economic Survey or neither I go by the first advance estimate of 9.2 per cent for FY22, because these projections never take unorganised sector data in the consideration.”
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