Budget 2023: Nirmala Sitharaman tables Economic Survey; India’s GDP growth pegged at 6-6.8% in FY23-24

Economic Survey: On the first day of the Budget Session, Union Finance Minister Nirmala Sitharaman on Tuesday presented the Economic Survey in Parliament. The Economic Survey pegged the country’s GDP growth at 6-6.8% in the financial year 2023-24. 

Meanwhile, it also emphasised the need for careful monitoring of the Current Account Deficit (CAD), which could continue to grow due to elevated global commodity prices

According to the latest Reserve Bank data, the country’s current account deficit widened to 4.4% of the GDP in the quarter ending September, from 2.2% of the GDP during the April-June period due to a higher trade gap.

Some key points of the Survey 

“A downside risk to the current account balance stems from a swift recovery driven mainly by domestic demand, and to a lesser extent, by exports. The CAD needs to be closely monitored as the growth momentum of the current year spills over into the next,” the Survey outlined. 

The rate of growth in imports has been faster compared to that of exports in 2022-23 so far, leading to the widening of the trade deficit.

Sounding a note of caution, the key government document, which was tabled in Parliament, said that the challenge of the depreciating rupee, although better performing than most other currencies, persists with the likelihood of further increases in policy rates by the US Federal Reserve.

“The widening of CAD may also continue as global commodity prices remain elevated and the growth momentum of the Indian economy remains strong.

The loss of export stimulus is further possible as the slowing world growth and trade shrinks the global market size in the second half of the current year,” the Survey said.

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Survey outlines subdued global growth

The Survey also outlined that the subdued global growth presents “two silver linings” — crude oil prices will stay low, and India’s CAD will be better than currently presented.

Meanwhile, Sitharaman claimed that the surge in growth of exports in FY22 and the first half of FY23 induced a shift in the gears of the production processes from mild acceleration to cruise mode.

(With inputs from agencies)

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