India Economic Survey 2023-24: Conservative Growth Forecast at 6.5-7%

New Delhi, July 22 (PTI) The Economic Survey has projected a conservative growth of 6.5-7 per cent for the current fiscal year because of global uncertainties and various domestic challenges, experts said on Monday.

The projection is lower than 8.2 per cent growth rate estimated in 2023-24 and tad lower than Reserve Bank's forecast of 7.2 per cent for the current financial year.

Finance Minister Nirmala Sitharaman, who will present the Union Budget on Tuesday, tabled Economic Survey 2023-24 in Parliament on the first day of Monsoon session.

The survey has been authored by a team led by Chief Economic Advisor (CEA) V Anantha Nageswaran.

Commenting on the document, Ranen Banerjee, Partner and Leader Economic Advisory, PwC India said the CEA has sounded a cautious note by projecting a growth rate of 6.5-7 per cent for 2024-25, highlighting the global uncertainties and domestic challenges.

"The Economic Survey has proposed a compact between the central and state governments, corporate sector and academia to overcome the unprecedented economic scenario. There is a nudge to governments to let go of various regulations, citing the Ishopanishad," he said.

Banerjee further said there is also a nudge to the private sector to invest in IP, machinery and equipment.

Aditi Nayar, chief economist at ICRA opined that the survey implicitly stresses that in the medium term, growth needs to be supported by the private corporate sector as well as state governments.

"Managing inflation, on the other hand, is not just the prerogative of RBI and its monetary policy committee, and would require active intervention by the Centre, especially in the arena of food price management," she said, and added the realisation of both these paradigms is crucial to ensure an optimal growth-inflation mix over the medium term.

Rumki Majumdar, economist, Deloitte India said while the government has shouldered a larger responsibility to invest in infrastructure, private investment in IP and machinery too has been strong, growing cumulatively at 35 per cent in four years.

"But investment in dwellings and structures has been even stronger pointing to a higher inclination among households to save in physical assets," Majumdar said.

She further said the unemployment rate has decreased through the years, accompanied by increased participation among youth and females.

Keeping up with the momentum will be an important focus for the government as the accelerated growth of AI, specifically GenAI, is poised to revolutionize the nature of work and skills.

"Amid these disruptions shaping the future of work, the government will have to prioritise skill initiatives to prepare the workforce of the future," Majumdar added.

Vivek Jalan, Partner, Tax Connect Advisory Services LLP, said the survey has set the tone for the Budget which the finance minister will present in the Lok Sabha on Tuesday.

He said India seems set for becoming the third-largest global economy very soon as per the vision of the government.

"However, this vision cannot be achieved unless MSMEs are propelled forward, as they remain the chief employment generator and GDP driver for India. For MSMEs, the economic Survey does accept and recognise the need for maximum relief from compliance burdens," he said.

The Economic Survey is a key pre-budget document which provides a snap shot of the economy as well as suggestions for future growth.

On Budget, Chairman of Dhanuka group R G Agarwal said for a stronger agricultural sector and national food security, the government should implement a PLI scheme for crop protection and reduce GST on pesticides.

"This will empower farmers and make these crucial tools more affordable. To ensure sustainability and responsible use, we call for investment in advanced testing labs and a farmer-friendly regulatory framework that promotes traceability of crop protection products," he said.

Neeraj Akhoury, MD Shree Cement said the cement industry is optimistic about significant allocations in the Budget to housing and infrastructure, which account for over 80 per cent of the demand for cement.

"We expect further spending on highways, roads, bridges, and urban development, alongside more funds for projects. The announcement of a cement corridor in the Interim Budget has been encouraging, and we hope for more steps to enhance transport integration, making the movement of cement and related materials more efficient," Akhoury said.

The projection of India's growth in Economic Survey is a tad lower than the Reserve Bank's growth estimates of 7.2 per cent. However, major global agencies, including IMF and ADB, have projected the growth at 7 per cent.