India's economic growth in 2022-23 could spring a surprise: ASSOCHAM

Despite the COVID-19 pandemic, India's economic growth in the upcoming financial year, i.e., 2022-23, can be surprising on the higher side, ASSOCHAM Secretary-General said on Monday. 

"While the 8-8.5 per cent GDP projections for FY23 are on the back of a high base of 9.2 per cent in the current financial year, ASSOCHAM is of the view that India's economic growth can surprise us on the higher side. 

"Even as the pandemic is still raging in most parts of the world, its latest variant is less damaging. Besides, with 75 per cent of eligible Indians fully vaccinated and the booster dose being rolled out, India would be far better prepared to take on the challenges," ASSOCHAM Secretary General Deepak Sood said. 

ASSOCHAM said it shares the prognosis of the Economic Survey that the Indian economy is well placed to take on the challenges of 2022-23, riding on the back of continuous reforms in supply-side and safety nets to the vulnerable sections of the society. 

Sood further said that the advance estimates suggest manufacturing to be growing by 12.5 per cent in the current fiscal while services would expand by 8.5 per cent. 

"Traditionally, services grow at a faster face. Clearly, the Covid impact on contact intensive industries is reflecting even as manufacturing has been aided by supply-side reforms. Once the impact of PLI scheme kicks in, we expect the manufacturing to be leading the growth for the foreseeable future," Sood said, adding that robust performance in exports has also helped the manufacturing.

He further said that the Economic Survey is right in its assessment about the investment scenario, saying: "The private investment recovery is still at a nascent stage, though there are increased activities in the brownfield projects. Heavy lifting would still be needed by the government with capital expenditure, and we expect that in the Budget."

The Survey has pointed out that the government has the fiscal capacity to maintain the support, and ramp up capital expenditure when required, ASSOCHAM said in a statement.

"Schemes like credit guarantee with 100 per cent guarantee for additional funding of Rs 4.5 lakh crore to MSMEs have provided critical relief to the sectors severely hit by the pandemic. More such measures are expected in the Budget," it said.

"The Survey has re-emphasised the government's asset monetisation and disinvestment agenda, which spells out bare minimum presence of government ownership even in the strategic sectors. Successful completion of Air India disinvestment should infuse confidence for the roadmap," it added.