Survey paints rosy picture

New Delhi: India will retain its tag of the world's fastest-growing major economy as the pre-Budget Economic Survey on Monday forecast an 8-8.5 per cent GDP growth in the fiscal year starting in April, saying it has the fiscal space to do more to support the economy and is well placed to meet the future challenges. India is poised to wrest the title world-beating economy tag this fiscal with a projected growth of 9.2 per cent, and the widespread vaccine coverage, supply-side reforms and easing of regulations are going to support it in the next.

The Economic Survey -- an annual report card of the economy -- presented in Parliament by Finance Minister Nirmala Sitharaman, warned about risks from global inflation and pandemic-related disruptions. Sitharaman is expected to announce plans to boost spending to revive investment and create jobs in her Budget to be presented on Tuesday. The survey assumed oil prices will range between $70 and 75 per barrel next year even though they are above $90 now. It also assumed a normal monsoon rainfall and an orderly withdrawal of global liquidity by major central banks.

"The projection is based on the assumption that there will be no further debilitating pandemic related economic disruption, monsoon will be normal, withdrawal of global liquidity by major central banks will be orderly," the survey said.

The growth projections are in line with the forecast by the World Bank, but less than nine per cent forecast of IMF. They are slightly higher than that predicted by S&P and Moody's. The growth will be supported by 'widespread vaccine coverage, gains from supply-side reforms and easing of regulations, robust export growth, and availability of fiscal space to ramp up capital spending," the survey said.

Sanjeev Sanyal, principal economic adviser at the finance ministry and the lead author of the survey, said: "India does need to be wary of imported inflation, especially from elevated global energy prices." India is 85 per cent dependent on imports to meet its oil needs. "The global environment still remains uncertain," the survey said citing the planned withdrawal of monetary support by major central banks, including the US Federal Reserve. Higher rates elsewhere could lead to capital outflows for India.