Finance Ministry: India Economy to Grow at Quickest Pace Among Large Nations

With the third wave of vaccinations nearing completion, India would develop at the fastest rate among large nations in FY23, with growth consistent across sectors, according to the finance ministry‘s department of economic affairs in its monthly economic report.

“In a testament to the tenacity of its people and the foresight of its policymakers, the Indian economy, which shrunk by 6.6 percent in 2020-21, is now projected to expand the fastest among the league of large nations in 2022-23,” according to the report.

Agriculture, which is continuing to grow in net sown area and crop diversification, will boost food buffers while benefiting farmers through large volumes of purchase at remunerative minimum support prices and income transfers under the PM KISAN plan, according to the report.

The report also addressed the recent controversy over foreign rating agencies and multilateral organizations lowering India’s growth estimates. “In its January 2022 update, the International Monetary Fund (IMF) decreased its global growth forecast for 2022. “However, India is the only large and major nation on the IMF’s list whose growth projections have been revised upwards in 2022 (Read 2022-23),” according to the report.

Going forward, FY23 is expected to witness “inclusive and large enough” growth, allowing for increased levels of direct income and in-kind support to society’s most disadvantaged segments, according to the report. The paper continued, “The present year may as well end with an economic reset characteristic of a post-COVID world.”

Overall economic activity remained resilient, according to the report with respect to third wave of COVID-19, as evidenced by solid performance of numerous high frequency indicators such as electricity consumption, PMI manufacturing, exports, and e-way bill generation.

It emphasized that high-frequency indications imply India’s economy is on track to grow at or above 9% this year, as expected in the country’s advance projections.

In terms of rising inflation, the research predicts that it will stay within the 42% tolerance limit this year. The Monetary Policy Committee of the Reserve Bank of India has kept its inflation prediction for 2021-22 at 5.3 percent.

In 2022-23, the Budget has set a nominal GDP growth target of 11.1%, with a GDP deflator of 3.0-3.5%. The implied real growth component of just over 8% is similar to the prediction in the Economic Survey for 2021-22, as well as the 7.8% forecasted by the RBI’s Monetary Policy Committee (MPC) during its February 2022 meeting.

The MPC’s accommodative approach, together with the unaltered repo and reverse repo rates, priorities growth during these uncertain times and strengthen the budget’s investment focus.

The study provided a cautious but optimistic picture of the economy for the year ahead. “The spirit of Atmanirbhar Bharat will continue to encourage private investment, which will be aided by complementary state infrastructure investment. At the first sign of a new infection, private consumption would develop slowly as a precautionary demand for money rises “It was stated.

It also guaranteed that the Mahatma Gandhi National Rural Employment Guarantee Scheme, which provides an additional layer of security for the rural workforce, would always be ready to deploy.

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