NE BUSINESS BUREAU
CHENNAI, JUNE 15
Expressing optimism about India’s growth potential, Chief Economic Advisor, Dr V Anantha Nageswaran said on Thursday that India will be the third largest contributor to the global gross domestic product (GDP) this year.
On occasion, Dr G S K Velu praised the Indian economy's resilience. He also spotlighted 'India’s Century,' a forward-thinking plan by FICCI and McKinsey & Company, aiming to transform India into a high-income economy by 2047. pic.twitter.com/kNAIHRJPu0
— FICCI (@ficci_india) June 15, 2023
In his address at the interactive session organised by FICCI, Nageswaran said: “We were the 10th largest economy in 2014, and we expect to become the third-largest economy in 2027.”
- We were the 10th largest economy in 2014, and we expect to become the third-largest economy in 2027: Chief Economic Advisor, Dr V Anantha Nageswaran
- Private Sector Capital Expenditure will be an important contributor to growth in the coming years – Chief Economic Advisor
- Dr G S K Velu, Chairman, FICCI Tamil Nadu State Council and CMD, Trivitron Healthcare Group of Companies, praised the Indian economy’s resilience
According to him, to achieve that the country has to continue to “do the right thing”.
He mentioned that India’s contribution to global GDP growth has risen six-fold since the turn of the millennium.
“India is set to become the third-largest contributor to global GDP this year,” Nageswaran said.
He affirmed that India’s real GDP growth for FY23 was a robust 7.2%, with expectations for the final figure to be even higher.
“We have had two successive good years, strengthening the recovery from the pandemic-induced contraction,” stated Dr Nageswaran. He explained the lower growth figures reported in the third quarter of FY23 due to base effect adjustments, not a loss of economic momentum.
Dr Nageswaran also provided an outlook for FY24, projecting a real GDP growth of 6.5%, a figure supported by both the Ministry of Finance and the Reserve Bank of India.
He stated, “The risks surrounding this number are evenly balanced, suggesting a strong likelihood of achieving this growth target.”
Addressing the impact of the pandemic on private consumption, Dr Nageswaran observed that despite setbacks, the trend line for private consumption has caught up to pre-pandemic levels.
Dr Nageswaran highlighted the robustness of the agriculture sector, emphasising its readiness to handle potential supply disruptions. CEA also emphasised the economy’s robust expansion, driven by strong growth in industry, services, and construction sectors. He highlighted companies’ confidence in expansion, supported by steel and cement production data, indicating a post-pandemic rebound in line with pre-pandemic trends. He stated, “There is confidence among the companies and firms and they are looking to expand.”
“We do expect that capital expenditure by the Indian private sector will be an important contributor to growth in the coming years,” he explained.
He acknowledged the concerns about rural consumption but highlighted a turnaround in the fourth quarter that has continued into the current financial year. Rural wages are rising at high single-digit growth rates, supporting rural consumption.Turning to the urban demand side, Dr Nageswaran noted strong growth in passenger vehicle sales and new housing launches.
He further underlined the government’s commitment to continue to be fiscally responsible while supporting the economic recovery, citing a declining fiscal deficit target from 5.9 per cent to an intended 4.5 per cent by FY26.
On the occasion, Dr G S K Velu, Chairman, FICCI Tamil Nadu State Council and CMD, Trivitron Healthcare Group of Companies, praised the Indian economy’s resilience. “India, with its 7.2% GDP growth for 2022-23, is among the fastest-growing major economies globally, demonstrating significant resilience amid worldwide downturns,” said Dr Velu.
Dr Velu also drew attention to ‘India’s Century,’. This forward-thinking plan aims to transform India into a high-income economy by 2047. Key strategies include enhancing competitiveness to position India as a global manufacturing hub, employing schemes akin to PLIs in sectors with high export potential. Additionally, scaling up around 10,000 small and 1,000 midsize firms by 2030 is advocated, with easy financial access and improved ease of business procedures. Lastly, with power demand expected to double by 2030, the strategy emphasises the necessity for energy independence and affordable clean energy.
Addressing the gathering, Sunil Sanghai, Chair of FICCI Capital Markets Committee and CEO of NovaaOne Capital, commended the country’s economic management. Mr. Sanghai acknowledged the focused approach on capital formation, systematic government expenditure channelling, unwavering focus on inflation, digitisation and putting money in the hands of those most in need.
He urged the need for increasing domestic savings, stressing the fickle nature of foreign inflows and the reliability of domestic savings. He highlighted the potential of tourism as a sustainable avenue for generating employment and foreign inflows.
In his Vote of Thanks, Bhupesh Nagarajan, Co-Chairman, FICCI Tamil Nadu State Council and CMD, Indira Projects, affirmed that India will be the world’s third largest economy in four years. He highlighted India’s potential as a global food supplier, manufacturing hub, digital superpower, and start-up nucleus, to be achieved through supportive policies and industry’s entrepreneurial spirit.
