India's gross domestic product or GDP is scheduled to grow 9.2% (FY22) this financial year and 8%-8.5% in the next (FY23), after contracting 7.3% in FY21.
These numbers are a part of the Economic Survey, which is prepared under the Chief Economic Advisor and is released a day before the presentation of the Union Budget in Parliament. While the Union Budget is a forward-looking exercise on the financial year ahead, the Economic Survey is a snapshot of the current financial year. This Economic Survey has a preface penned by the Principal Economic Advisor Sanjeev Sanyal. The current Chief Economic Advisor, V. Ananth Nageswaran was appointed a few days ago on January 28.
"Overall, macro-economic stability indicators suggest that the Indian economy is well placed to take on the challenges of 2022-23", says the survey.
India's GDP has crossed ₹145 lakh crores, which was the value of India's economy at the end of FY20, which indicates that the Indian economy is back to, and has even exceeded pre-pandemic levels.
The estimates for FY22 are largely in line with what the International Monetary Fund released last week, but that for FY23 is half to one percentage point lower.
Also Read: IMF: India To Grow 9% In FY22,23 As World Enters 2022 On A Weaker Note
State of the economy
While the health impact of the second wave of the COVID-19 pandemic was more severe than the first, its economic impact was comparatively minimal. Agricultural growth is seen at 3.9% for FY22 over growth of 3.6% in FY21, and industrial growth at 11.8% this year over a contraction of 7% last fiscal. Services grew by 8.2% over a contraction of 8.4% last fiscal. This cements the fact the services sector has been the most widely hit sector by the ill-effects of the pandemic.
India's foreign exchange reserves stood at $634 billion, which is higher than its external debt, and is equal to 13.2 months of merchandise imports. "The combination of high foreign exchange reserves, sustained foreign direct investment, and rising export earnings will provide an adequate buffer against possible global liquidity tapering in 2022-23", states the Economic Survey, in reference to global central banks hiking interest rates and reducing pandemic-era easy money.
The Economic Survey refers to the healthy government revenues for this financial year. This means that the government will meet its targets for this year, can maintain all support and capital expenditure. The government also has the space to provide added support and packages if needed.
On banking, the government had provided a moratorium on the repayment of loans. There was also concern on the impact the pandemic would create on the asset quality of banks. The Economic Survey has said the non-performing asset overhang seems to have declined even after accounting for some lagged impact of the pandemic.
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Also Read: Budget 2022 Live: India's GDP To Grow 9.2% This Year, 8-8.5% In FY23