KOCHI: Sounding extremely bullish on the growth prospects of the Indian economy, Dr V Anantha Nageswaran, Chief Economic Advisor, Government of India, on Monday said despite challenges in the exports front due to global uncertainties, the Indian economy would continue to grow 6.5% over the remainder of the decade with opportunities for 7% growth in some years.
Speaking at an industry interaction jointly organised by the Associated Chambers of Commerce and Industry of India (Assocham) and the Kerala Management Association (KMA) here on Monday, Dr Nageswaran said he reckoned the digital economy and the capital investment by businesses would add another 1% to the GDP. "My own personal assumption is that capital investment by businesses, which was absent last decade, will add about 0.3-.5% to growth, and the digital economy will add another 0.3-0.5% to GDP growth," he said.
Stating that the government was realistic in its growth projections, he admitted that the exports will pose a problem. "We have a problem in goods exports because global growth is slowing. India has done well to diversify its export basket over the last 30 years or so. However, it doesn't matter whether you have something to sell if the person coming into your shop doesn't have money in his or her wallet. Global growth is important for export growth. And therefore, merchandise export growth is something we will have to work hard to keep our market share. That's why the industry has to invest in R&D, has to do better marketing, diversify our products range, focus on quality, and it's going to be a hard drive for the rest of the decade," he said.
He said India has done tremendously well, growing from $280 billion economy in 1993 to $3.4 trillion in 20 years, in spite of the currency depreciating from 30 plus to 80 plus to a dollar. India, which is the fifth largest economy, is expected to become the third in size
"But this is not preordained. It has to be earned. And what is happening is that India is becoming consequential for the world because of our progress from the number 10 position to number five position. We are contributing to 1/16th of the global GDP now, compared to barely contributing 1/100 about 20 or 15 years ago. And it will become better if we continue to deliver on our potential and promise," he said.
He said the food grain production in FY23 is going to be quite high. The storage in the reservoirs is at least 20% higher than the last 10-year average. Seed availability for farmers is plentiful and procurement of wheat has been higher than the previous financial year. "So in the event of the shortfall in kharif crop we have adequate food stock to ensure supply and keep down price increases," he said.
The tractor sales have well surpassed the pre-pandemic levels, indicating that the farmers have both incomes and the farm sector is well poised to take advantage of the Kharif crop.
On the exports front, he said India exported goods and services worth $770 billion, which is about 1/5th of the exports of China. "But then, the Chinese economy is four times bigger than ours. So, when we get to that size, our exports will also be commensurately on the higher side," Dr Nageswaran said.