India shouldn’t be looking at 8-9% GDP growth at this point, says CEA

That is one of the reasons why export growth in the second decade wasn’t as good as it was in the first decade.
Chief Economic Advisor V. Anantha Nageswaran speaks after presenting the Economic Survey 2022-23 during a press conference, in New Delhi, Tuesday, Jan. 31, 2023. (PTI)
Chief Economic Advisor V. Anantha Nageswaran speaks after presenting the Economic Survey 2022-23 during a press conference, in New Delhi, Tuesday, Jan. 31, 2023. (PTI)

NEW DELHI:  India shouldn’t be looking at 8-9% GDP growth at this point because the difference between the first decade and now is that the global economy was booming then and now it is not, said  V Anantha Nageswaran, chief economic advisor, on Tuesday in a press conference on Economic Survey 2023. 

While responding to the question asked by this newspaper, he stated in the second decade as well, in spite of the aggressive unconventional exception monetary easing in the developed world, economic growth was not to the extent as they would have anticipated. That is one of the reasons why export growth in the second decade wasn’t as good as it was in the first decade.

“So we are being prudent in not assuming that the exports would be such a big contributor to the growth as it was in the first decade. But if it does turn out to be wrong, and the global economy does better, and given India’s services growth and the manufacturing capacity is being created and the efforts to plug ourselves in the global supply chain, export growth also kicks in, that would see our potential growth rise from 7% to 8%,” Nageswaran added. Meanwhile, on the issue of lackluster private investment, CEA said the businesses are cautious because of global pandemic and commodity price shocks. He said the credit and capex cycle will gather steam once the several global shocks dissipate.

“…But if you look at the data, for the first half of the FY21, FY22 and FY23, private investment numbers in nominal rupee terms have been increasing and in all the 10 sectors . So capital investment by private sector is beginning to kick in despite several shocks coming one after the other. So, once the shocks dissipate, I do expect India’s credit and capex cycle to gather more steam than what they have today,” he added.  

In addition, on the question of risk of slowdown in China, he said the government is looking at the implications of China’s reopening of economy on inflation and supply chain disruptions. He declined to comment on economic crisis in Pakistan. “China has reopened after its zero covid policy and the IMF has raised its growth forecast and naturally we are looking at the implications.”

Businesses cautious due to pandemic, price shocks
V Anantha Nageswaran, chief economic advisor said the businesses are cautious because of global pandemic and commodity price shocks. He said that the credit and capex cycle will gather steam once the several global shocks dissipate

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