Economy on course to achieve 8-8.5% growth based on Q1 data, says Finance Ministry

Finance ministry on Tuesday said that the economy is on course to achieve projected 8-8.5 per cent growth based on high-frequency indicators for the first quarter of the current fiscal.

The Economic Survey tabled in the Parliament on January 31, 2022 projected the real GDP during 2022-23 to grow at 8.0-8.5 per cent.

"Since then, sustained growth momentum has been observed in several High Frequency Indicators (HFIs), indicating that the projected growth path is on course in the first quarter of FY 2022-23," minister of state for finance Pankaj Chaudhary said in a written reply to Rajya Sabha.

IMF, in its April 2022 update of World Economic Outlook, has also projected India's real GDP growth at 8.2 per cent in 2022-23.

To ensure continued growth momentum, he said, the government has taken several steps to address high inflation imported from abroad.

These include cut in excise duty on petrol and diesel and special excise duty/cess on the export of petrol, diesel and aviation turbine fuel that are likely to alleviate inflationary pressures, he said.

Further, he said, to rein in inflation, RBI in its June Monetary Policy Committee meeting hiked the repo rate by 50 basis points, on top of the earlier hike of 40 basis points in May 2022.

On the impact of geopolitical tension on Indian economy, he said, Russia-Ukraine war has led to global supply disruptions resulting in steep increase in global commodity prices, including prices of crude oil, gas, edible oils and fertilizers, among others.

The government is closely monitoring the global price movements and their impact on India's economy through trade, he said.

Recently, prices of various commodities, including edible oils, metals and crude oil, have stabilised. Many central banks including the US Fed have also tightened their monetary policy to tackle inflation. The RBI and government is closely monitoring the situation and stand ready to take appropriate action, he said.

As per provisional estimates of annual national income 2021-22, Gross Domestic Product (GDP) at current prices for 2021-22 stood at Rs 2,36,64,637 crore, he said in another reply.

Using the implied exchange rate for India for 2021-22 from World Economic outlook (WEO) of April 2022, the GDP for India at current prices stood at USD 3.2 trillion in 2021-22, he said.

The real GDP growth rate for 2021-22 stood at 8.7 per cent while the central government's fiscal deficit for 2021-22 was Rs 15,86,537 crore, which is 6.7 per cent of GDP.

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As per the quarterly report on public debt management for the quarter January- March 2022, he said, the provisional estimate for central government's public debt at end of financial year 2021-22 was 52 per cent of GDP.

The reasons for increase in the debt include the pandemic-induced revenue shortfall in 2020-21 combined with the higher spending undertaken by the government to protect lives and livelihood of the people from the adverse impact of the pandemic, he said.

In reply to another question, he said, the size of India's Current Account Deficit (CAD) depends on several factors, including exports, imports and price of crude oil, among others.

The government is carefully monitoring the CAD and has recently increased customs duty on gold from 10.75 per cent to 15 per cent to restrain gold imports that is likely to reduce CAD.