GRIN IN GRIM TIMES
Robust credit growth of MSMEs at over 30% in April-November 2022
1 Growth will moderate a little; then fast forward 2 Recovery from pandemic is complete, says survey 3 Lower oil prices silver lining despite conflict
4 Survey confident external situation ‘manageable’
5 Recession will prompt return of capital flows
The Economic Survey normally paints a picture of the economy over the past fiscal, even as it seeks to forecast the outlook for the coming year. This year’s assessment has been eagerly awaited, as the forthcoming budget will be the last for a full year by the incumbent government, and projects a mood of confidence and optimism in the run up to the elections in 2024. The Survey asserts that recovery from the pandemic has been “complete” as the country remains the fastest growing major economy in the world.
The Survey expects growth in real terms to moderate from 7 per cent in 2022-23 to 6.5 per cent in 2023-24. The International Monetary Fund has buttressed the survey’s upbeat outlook by pegging India’s growth at 6.1 per cent in 2023 as compared to the global estimate of 2.9 per cent. It has gone on to forecast 6.8 per cent for FY 2025.
Economic Surveys do not always reflect initiatives taken in the budget, but do indicate the thinking of policymakers
while formulating the government’s annual accounting exercise. This time the Survey has given a clear hint that the capex drive of the last two budgets may be continued this time as well. It says the capex push was a strategic initiative aimed at crowding-in private investment into the economic landscape. In this context, it points to the trend of rising private sector projects. It also highlights the robust credit growth of MSMEs which has been estimated at more than 30 per cent in the period from
April to November 2022.
The Survey sounds a note of caution on the impact of global headwinds on the economy. It says the external environment has been characterised by monetary tightening because of multi-decade highs in inflation numbers. This led to slowing down of economic growth in advanced countries, which are facing the spillovers of disruption of supply chains and uncertainties caused by geopolitical conflicts such as that in Ukraine.