While the Economic Survey has projected a growth range of 6-6.8 per cent for the fiscal year 2023-24, experts are not aligned with this. Lakshmi Iyer, CEO-Investment Advisory, Kotak Investment Advisors says the projections for FY24 seem a tad stretched. “The economic survey has projected FY 2024 growth at 6-6.8 per cent. This 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.”
Echoing the sentiments Ranen Banerjee – Partner and Leader Economic Advisory Services, PwC India says the Economic Survey has projected a baseline GDP growth of 6.5 per cent for FY24 with a wide range of 6–6.8 per cent for actual growth outcome, which is understandable given the uncertain global economic scenario. “The message that the growth thrust would be driven by higher capital expenditure, private consumption, credit growth to small businesses, strengthening corporate balance sheets and the return of migrant workers to cities could provide us with some cues about what we can expect in the budget,” says Banerjee. He predicts that the Budget on 1st February may come with a big dose of capex allocation; some income tax relief to provide more money for consumption at the lower end of the income brackets; continuation of the Credit Guarantee Scheme for MSMEs; PLIs for new sectors to enthuse private capex; and possible plateauing of the allocation to MGNREGA.
Iyer from Kotak Investment Advisors points out. “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. 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 that it should be Rs 16 lakh crore.”
Rumki Majumdar, Economist, Deloitte India points out that the sudden opening of China, a possible halt of the monetary policy tightening by the US Fed, and resilience in many EU nations could imply that the world economic growth may not be as bad as was anticipated. “The IMF’s upward revisions for the US and China in 2023, point to a stronger global economy. Strong recovery in China could also imply higher demand for commodities, thereby resulting in rising prices. This could mean that fight against inflation for India will likely continue. The right mix of fiscal-monetary policies will be key to building a resilient economy,” adds Majumdar.
Enthused by the survey projections on GDP growth rate Vivek Rathi, Director-Research, Knight Frank India, a leading real estate consultancy and services firm said at 7 per cent GDP growth in FY23 and 6-6.8 per cent growth in FY24, India will continue to hold its fastest growing large nation tag. “This will create tailwinds for the Indian economy as global capital and technology finds India a bright spot to participate in an otherwise weak global economic order,” said Rathi. “Real estate, being a derived demand product and an economic multiplier, will certainly benefit from this improved economic outlook for the country. While housing demand remains strong leading to reduced inventory levels, the resumption of construction activities has ensured sustained supply thereby averting sharp price rise risk in the sector,” he added.
Ramesh Nair, CEO, India and Managing Director, Market Development, Asia, Colliers agreed that the Economic Survey 2023 provided an optimistic picture of India’s growth performance and outlook, amidst looming global recessionary concerns. “The economy has largely recovered from the pandemic, with GDP likely to grow at 6.5 per cent in FY24. Robust domestic demand and a pickup in capital investment are likely to steer growth,” Nair added.
Agri Boost Needed
Experts in the agriculture and allied sectors are hoping for a boost to the sector by way of certain specific measures in the forthcoming Union Budget.
R.G. Agarwal, Chairman Dhanuka Group said compared to China, the average per acre production in India is lower, in-fact, it is one-third in comparison to China. “There is a lot of scope to enhance production further. For this, Government should further incentivise R&D activities in the agriculture sector and should encourage the adoption of newer technologies like Drones, etc. Also, the usage of quality agri-inputs including fertilizers and other agrochemicals in appropriate quality and right manner should be encouraged,” Agarwal said.
Kalyan Goswami, Director General, Agro Chem Federation of India is hoping for a continuation of the agri-related credit and income schemes. “As per the Economic Survey, the agriculture sector grew 4.6 per cent annually in the last 6 years. It is a very good sign. Key factors boosting the sector include higher MSP extended by the government. It is also attributed to growing agri-related credit, income support schemes, and insurance. We urge for the agri-related credit and income schemes to continue in the future too,” said Goswami.