PM's advisory body sees 7.5% growth in FY23

The economic advisory body to the Prime Minister has projected India's economy to grow 7-7.5% in the next fiscal year, and called for a clear roadmap for privatisation and continuing growth orientation in the upcoming budget.

It expects contact-intensive sectors to recover and investments to pick up in the fiscal year starting April 2022. These sectors, such as travel, hospitality and tourism, were among the worst hit by the pandemic. "Members were optimistic about real and nominal growth prospects in 2022-23. Other than an element of the base effect, the contact-intensive sectors and construction should recover in 2022-23," the Economic Advisory Council to the Prime Minister (EAC-PM) said in a statement after a meeting on Thursday. "Once capacity utilisation improves, private investments should also recover," it said.

The Reserve Bank of India expects the economy to grow 9.5% in the current fiscal year.


The council said the budget for 2021-22 was well taken in all the spheres due to transparency and realism and it was reformist and growth oriented.

On the Same Path
It called for the budget for FY23 to follow the same path. It should signal the use of the extra revenue in the form of capital expenditure and human capital expenditure, as Covid-19 has led to a human capital deficit, the council said.

"However, this should not mean that the Union Budget for 2022-23 should project unrealistically high tax revenue or tax buoyancy numbers," the EAC-PM said in the statement.

The council was reconstituted last month. Former RBI deputy governor Rakesh Mohan, IIM professor TT Ram Mohan and National Council of Applied Economic Research director-general Poonam Gupta were inducted as the new part-time members for a two-year term. Bibek Debroy continues to chair the council.