GDP GROWTH SEEN SLOWING TO 7% IN FY23 IN FY23
The real gross domestic product (GDP) at constant (2011-12) prices is estimated to reach Rs 157.60 lakhs crore in financial year 2022-23
India's economic growth is estimated to slow to 7% in the financial year 2022-23 from 8.7% recorded in the previous year, dragged down by a sharp drop in manufacturing and mining sectors, as per the National Statistical Office (NSO) data released on Friday.
The real gross domestic product (GDP) at constant (2011-12) prices is estimated to reach Rs 157.60 lakhs crore in the financial year 2022-23, according to the first advance estimates of GDP. The provisional estimate of GDP for the year 2021-22 stood at Rs 147.36 lakh crore.
The NSO growth projection for the current fiscal is better than the Reserve Bank of India's projection. Last month, the RBI cut India's real GDP growth forecast to 6.8% from its earlier estimate of 7% citing the tightening of global financial conditions and geopolitical tensions in Europe.
Nominal GDP or GDP at current Price in the year 2022-23 is estimated at Rs 273.08 lakh crore, as against the provisional estimate of GDP for the year 2021-22 oF Rs 236.65 lakhs crore, released on may 31,2022. The growth in nominal GDP during 2022-23 is estimated at 15.4% as compared to 19.5% in 2021-22, the NSO said.
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Private final consumption expenditure, a measure of demand, is estimated to grow by7.7% in the financial year ending March 2023 as compared to 7.9% in 2021-23.
Gross fixed capital formation, a measure of investment, is estimated to grow by 11.5% in 2022-23 as compared to a growth of 15.8% recorded in the previous year.
The manufacturing sector is set to be the biggest drag. The manufacturing output growth is estimated to slump to 1.6% in the current financial year from 9.9% recorded in 2021-22, The growth of mining & quarrying sector is estimated to slow down to 2.4% in the current financial year as against 11.5% recorded in the previous year.
However, agriculture sector growth is provided to accelerate to 3.5% in 2022-23 from 3% in the previous year
Services sector growth is also estimated to accelerate. Financial, real estate and professional services are estimated to post a growth of 6.4% in fiscal 2022-23 as compared to 4.2% broadcasting are estimated to grow at 13.7 in 2022-23, substantially higher than 11% growth recorded in the previous year. Reacting to the NSO data, Aditi Nayar, chief economist, ICRA LTD, Said the GDP estimate of 7% for 2022-23 factors 4.5 growth for the second half of the fiscal.
"We believe that buoyant albeit mixed domestic consumption should help to stave off some of the pain arising from weak exports during this period. Contrary to our expectations, the NSO expects private final consumption expenditure to contract by 0.2% YoY in H2 FY2023. Further, it expects exports to rise by 11.9% in h2 FY2023, which we believe is unlikely given the flagging external demand," said Nayar.
The NSO's growth projection for agriculture for H2 Fy2023, at 2.7%, is slightly lower than our forecast for the same period, Given the brisk sowing (YoY growth of 4.5% unto Dec 30,2023), improved fertiliser availability and healthy reservoir levels, we expect rabi sowing in FY2023 to exceed year ago levels by 1.0-2.0%, which contribute to agriculture GVA growth of 3-4% in H2 FY2023, while entailing a base-effect led easing inn Q4, she added.
India's GDP to near $20 trillion by 2047, says EAC-PM chief Bibek Debroy
According to him, India may witness voltailities in forex markets and capital market and exchange rates due to some of the uncertainties around the world
The size of the Indian economy will increase to around $20 trillion by 2047 from the current around $3.5 trillion, while the per capita income is expected to reach $10,000 when India celebrates 100 years of its independence, Bibek Debroy, Chairman, Economic Advisory Council to the prime Minister, said on Wednesday.
"In 2047 India will have a per capita income of the value of today's dollars of $10,000. the average size of the GDP will be approaching close to $20 trillions too," Debroy said while virtually addressing the inaugural session at the 57th Annual Conference of the Indian Econometric Society (TIES) held at the University of Hyderabad.
Prime Minister Narendra Modi Government has set a target to make India a developed nation by 2047. however, there is so specific target set for per capita income or the size of the economy.
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However, the much-hyped $5trillion dollar economy target by the year 2024 is unlikely to be met.
"Economic indicators after the covid-19 have improved in India. Everyone is now looking to see the rate of growth in 2023-24 and the growth of the economy by 2047. The pandemic may have passed but still there is a lot of uncertainly around the world," Debroy said.
"There is uncertainly around what is happening in China, about the Russia Ukraine conflict, growth prospect in Europe and the USA. Since India is not insulted, we will also face volatility, Forex markets and capital markets and exchange rates will face volatility. Inflation rates will also be impacted by some uncertainly, he added.
The Chairman of the Economic Advisory Council to the Prime Minister pointed out that there are four sources of growth-consumption, private investment, government expenditure and net exports.
"The global market is not going to be rosy. we tend to forget that when India did 9 percent growth, our exports performed quite well. The net GDP ratio is also very high," he said.
“Different states are at different levels of development and hence, the sources of growth will also be different. But the fact of the matter is that to raise the growth trajectory, we need to make land markets more efficient. Agriculture will also vastly improve when we make land markets more efficient. Similarly, we need to make the labour markets and capital markets also more efficient,” Debroy added.
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