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Centre to act quickly on reforms to realise Eco Survey optimism: CARE Ratings
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IANS | 31 Jan, 2023
The government should act quickly on reforms so that the optimistic
picture painted by the Economic Survey 2022-23 can become a reality,
said a top economist with CARE Ratings.
She added that
there could be some fizzling out of pent-up demand in FY24 that is seen
in the current fiscal and given the volatile geo-political situation,
caution should be exercised on the external situation.
The Economic Survey was placed in the Parliament on Tuesday.
"Overall,
the survey paints an optimistic picture that definitely can become the
reality if the government acts quickly on some of the reform measures
and takes steps to grab the geo-political opportunity," Rajani Sinha,
Chief Economist, CARE Ratings, told IANS.
She said the Survey has reaffirmed India's economic resilience in the midst of the global slowdown.
"In
the baseline scenario, a growth of 6.5 per cent is expected in FY24,
higher than our expectation of 6.1 per cent. We feel that while India
will maintain healthy growth momentum, there is a need to be cautious
given the slowing global growth. Moreover, in FY24, we are also
expecting some fizzling out of the pent-up demand seen in the current
fiscal," Sinha added.
Referring to the Survey talking about
potential gross domestic product (GDP) growth of 7-8 per cent per annum
in the medium term, Sinha said this higher potential growth is
achievable if some of the reforms required to improve productivity and
improve ease of doing business are implemented in a timely manner.
"Moreover,
there is a need to focus on inclusive growth, hence investment in human
capital and support for the unorganised sector and MSME segment becomes
critical," Sinha remarked.
According to Sinha, the survey
highlights that overall inflationary pressure could be expected to ease
in FY24 from the levels seen during this year.
"This is in line
with our expectation of average CPI inflation moderating to 5.1 per cent
in FY24 from 6.5 per cent in FY23," she said.
"In the midst of
concerns around the global economy, the Survey highlights that the
external situation is manageable given our high forex reserves and low
external debt. With export slowing, we expect CAD to remain high at
around 2.2 per cent of GDP in FY24, but much lower than the estimated
3.5 per cent of GDP in FY23. We feel that given the volatile and
uncertain global environment, there is a need to remain cautious on the
external sector," Sinha said, sounding caution.
According to
Nilesh Shah, Managing Director, Kotak Mahindra Asset Management Company,
the Survey presents a cautiously optimistic forecast.
"The
Survey correctly predicts that the pitch is becoming easy with nascent
recovery in global macros, lower energy prices/inflation and revival in
private sector investment in days to come. It also highlights an odd
'doosra' ball which needs to be managed in the form of balance of
payment deficit and support to the consumption at the bottom of the
pyramid," Shah said.
According to him, India from being a coach
(follower) to global growth has become the engine (leader) for global
growth. The Economic Survey presents the direction of that journey. The
speed of that journey will be determined by the execution on the ground.
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
|
66.20
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64.50 |
UK Pound
|
87.50
|
84.65 |
Euro
|
78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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