Economic Survey: 6-6.8% FY24 growth prediction slightly stretched amid global slowdown; fiscal deficit target must be met, say experts

According to CEO-Investment Advisory, Kotak Investment Advisors Ltd Lakshmi Iyer the projection seems a tad stretched given the fact that there is a global slowdown, specifically in global exports.

"It also comes at a time when domestic demand is slowing down initially and we need to be fiscally prudent, especially after almost 3 years of the fiscal breach (globally too) due to the pandemic phase," she said.

"The survey also alludes to the fact that the tightening cycle may remain prolonged, which means higher interest rates for a longer period of time," he opined, adding "all eyes are now on the budget which could determine the trajectory of growth as also the direction of interest rates given the borrowing programme that will be announced tomorrow."

"Key to watch will be the gross borrowing numbers, which we estimate should be Rs 16 lakh crore,” she said.

Reacting to the Economic Survey, President of the Confederation of Indian Industries (CII) Sanjiv Bajaj said the survey has eluded that the government is on track to achieve the fiscal deficit target for the year despite fiscal pressures, which is commendable.

This would not only help maintain credibility and macro-economic stability but would also create the space for increasing capex significantly, especially in the infrastructure sector, to drive the economic growth engine in the current year and beyond, he noted.

“CII has been advocating that spending priorities should not come in the way of achieving the fiscal deficit targets for the year and has called for a roadmap for gradually reducing the fiscal deficit to achieve the goalpost of 4.5% by FY26,” he said.

According to the Survey, India is poised to emerge as one of the fastest-growing insurance markets in the coming decade, which is a significant achievement, he emphasised.

Bajaj complimented the government for its sound management of the economy and for promoting growth with inclusion amidst challenging global developments.

CII's Director General Chandrajit Banerjee said the government’s focus on reforms particularly on maintaining fiscal discipline, augmenting capital expenditure, strengthening social infrastructure, strengthening manufacturing, among others will provide a template for growth resurgence in the economy in the near future.

Some of the other policy initiatives taken by the government as mentioned in the survey to boost industrial outlook such as Atmanirbhar Bharat and Make in India, the PLI Scheme for building scale, improvements in ease of doing business, an infrastructure focus, promoting international trade settlement in Indian rupees, among others would enable make India better prepared to deal with the global uncertainties.

This would give a fillip to the economy, unlock our huge employment potential and make growth more inclusive, he underscored.