New Delhi : Indian economy could grow at 6.5-7% in FY23 and then accelerate to 8% on the back of rising investment and productivity, Chief Economic Adviser (CEA) KV Subramanian has said.
The CEA said that India had a V-shaped recovery last year and looking at last four quarter numbers during the pandemic it is the only country that has registered two consecutive quarters of growth.
Speaking at an industry event, Subramanian expressed hope that India should be able to hit high growth rate through higher investment rate and more productivity from privatization, increase in exports.
“This decade will be a decade of really high growth for India,” he added.
Addressing a Ficci conference on capital markets, Subramanian noted that the key focus of the government has been capital expenditure as it leads to a sustained economic growth.
“Capex creates demand in the informal sector and capex driven economy is important,’ he noted while adding that the reforms introduced by the government are as path-breaking as 1991 reforms and will indeed have impact on the investments and productivity.
Speaking on the fiscal deficit and capital expenditure the CEA said, “I don’t anticipate either breaching the fiscal deficit target or cutting down on expenditure. Some pruning on revenue expenditure has already started but not on capex as it is important for sustained recovery.”
While many macro indicators have shown recovery there is apprehension of a third wave of pandemic which could impact the growth.
Subramanian said that the economic prospects are linked to the pandemic and the target of the government is to vaccinate the entire adult population by December.
“Some of the statistics suggests that the intensity of the third wave, if it happens, may not be that large and the learnings from the second wave will be used. Therefore, the economic impact should be much lower,” he said.
UNI
