India Has Nearly Recouped, Recovery Relatively Quick, Says Economic Survey

Finance Minister Nirmala Sitharaman on Tuesday table the economic survey in Parliament, a day before presenting the Union Budget 2023. In the survey, which is a review of how the economy fared in the past year, the government said that India has nearly “recouped” what was lost, “renewed” what had paused, and “re-energised” what had slowed during the pandemic. The annual pre-Budget survey also forecast India’s economy to grow at 6.5 per cent in fiscal 2024.

The economic survey further said that India’s recovery from the COVID-19 pandemic was relatively quick, and growth in the upcoming year will be supported by solid domestic demand and a pickup in capital investment.

It also talked about the “multiple structural changes” that have been implemented over the past few years and added that the private sector was repairing balance sheets.

The survey presented the reasons for India’s economic resilience – a relatively higher growth forecast among major economies, projected retail inflation only slightly higher than the tolerance limit, an estimated current account deficit financeable with normal capital inflows and forex reserves large enough to finance close to a year’s imports.

In the section on India’s inclusive growth, the economic survey said that the country is the third-largest economy in the world in terms of purchasing power parity (PPP) – a tool used to determine the exchange rate of currencies while comparing the cost of living and wealth across nations worldwide.

However, talking about the rupee, the survey said it may remain under depreciation pressure on account of plateauing of exports and subsequent widening of the current account deficit.

India’s economy has rebounded since the COVID-19 pandemic, but the Russia-Ukraine conflict has triggered inflationary pressures and prompted central banks, including India’s, to reverse the ultra-loose monetary policy they adopted during the pandemic.