GDP growth to slide to 7% in FY23

The industry sector is set to witness a modest growth of 4.1% in 2022-23 as against 10.3% in 2021-22. The services sector to rebound with y-o-y growth of 9.1% this fiscal over 8.4% in 2021-22

New Delhi: Economic growth is expected to slide in the current fiscal, even as India is among the bright spots in the prevailing global scenario marred by fluid geo-political circumstances, as per the Fiscal Policy statement presented by Finance Minister Nirmala Sitharaman along with the Union Budget on Wednesday.

Nominal GDP is expected to grow at 15.4 per cent year-on-year in 2022-23 as against 19.5 per cent in 2021-22, while the real GDP is projected to grow by 7 per cent in the current fiscal year-on-year against 8.7 per cent in 2021-22, it said.

"Despite external exogenous shocks, India's economy is relatively insulated from global spillovers compared to other emerging market economies (EMEs), partly because of its large domestic market and relatively looser integration in global value chains and trade flows," the statement said.

On the growth outlook, it noted that growth in 2023-24 will be supported by solid domestic demand and a pickup in capital investment. The current growth trajectory will be supported by multiple structural changes like Insolvency Bankruptcy Code and GST, that have enhanced the efficiency and transparency of the economy and ensured financial discipline and better compliance.

India's public digital infrastructure expansion is leading to accelerated financial inclusion for low-income households, micro and small businesses, and the economy's rapid formalisation. Together these two factors - balance sheet strength and digital advancement - are growth differentiators not only for 2023-24 but also in the years ahead, it noted.

The path-breaking policies such as the PM Gati Shakti, National Logistics Policy, and the PLI schemes will strengthen the infrastructural and manufacturing base.