GDP may grow 7.5-8% in FY23: CII Chief

Mumbai : India’s economy is expected to grow 7.5-8 per cent this fiscal year with exports playing a key role in the country’s success story, CII President TV Narendran has said.

However, he said the country needs to remain prepared for any fallout of next wave of Covid-19 pandemic, and the impact of the ongoing Russia-Ukraine war.

We are confident that the economy can retain a high growth trajectory this year. So, we are very optimistic on the export front. Exports will be a key component of India’s success story going forward, Narendran said.

He said the resurgence of Covid globally will have an impact on the global supply chain and CII’s India economic growth estimate of 7.5-8 pc in the current fiscal factors these developments.
The experience with Covid shows that every time there is a fresh wave globally, it does hit India as well. Therefore, we must be prepared for the future waves, he said.

Observing that the rise in oil and other commodity prices has impacted margins of industries and purchasing power of consumers, the CII President, however, said there is no call for using a term like stagflation in the Indian context.

Growth for the current fiscal remains within the 7.5-8 per cent range. The IMF is looking at 8.2 pc growth for India and expects it to continue to remain the fastest growing major economy in the world. Average inflation for the year is expected to remain within the RBI’s target range, Narendran said.

Meanwhile, while risks to domestic growth warrant continued monetary policy accommodation, rising inflationary pressures have necessitated action, almost all members of Reserve Bank of India’s (RBI) monetary policy committee said, according to the minutes of its latest meeting.

The Reserve Bank of India earlier this month started to move away from its ultra-loose monetary policy even as it kept its key lending rate at a record low, as its priorities shifted to fighting surging inflation in the wake of the Russia-Ukraine war.

Circumstances warrant prioritising inflation and anchoring of inflation expectations in the sequence of objectives to safeguard macroeconomic and financial stability, while being mindful of the ongoing growth recovery, Governor Shaktikanta Das wrote in the minutes.

In a surprise move, the central bank restored its liquidity adjustment facility corridor to pre-crisis levels, which was seen as a first step to moving away from emergency measures embraced during the Covid-19 pandemic.