No. PR – 206
January 31, 2022
Indian economy well-placed to take on the challenges, economic growth to continue in the faster lane: PHD Chamber
Looking forward to a reform oriented Union Budget 2022-23 focusing on refuelling the consumption demand, private investments and employment creation
Mr Pradeep Multani, President, PHD Chamber of Commerce and Industry, while appreciating the Economic Survey 2021-22, said that the growth rate projection of 8-8.5% in FY2023 on the back of macro-economic stability and well- placed effective reforms undertaken by the Government.
It is encouraging to note that the growth in FY 2023 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, said Mr Pradeep Multani.
The Economic Survey estimates FY2022 growth rate at 9.2%, of which the agriculture and allied sectors is estimated to grow by 3.9%, industry at 11.8% and services at 8.2%, said Mr Pradeep Multani.
The Survey indicates that India’s agricultural exports continues to do well in 2021-22, backed by an effective agriculture export policy and with support of increased demand for staples during the COVID-19 pandemic, said Mr Pradeep Multani.
The steady recovery in industrial sector supported by initiatives under Atma Nirbhar Bharat is highly encouraging for businesses to move forward with a strong zeal and strength, said Mr Pradeep Multani.
It is laudable that the Government consumption is estimated to grow by a strong 7.6%, which is higher than the pre-pandemic levels and the private consumption is estimated to recover 97% of corresponding pre-pandemic output level, said Mr Pradeep Multani.
Government’s policy thrust on quickening virtuous cycle of growth via capex and infrastructure spending is highly appreciable. It has enhanced capital formation in the country, which has raised the investment to GDP ratio to about 29.6% in 2021-22, the highest in seven years, said Mr Pradeep Multani.
The Survey estimates a strong growth in Gross Fixed Capital Formation (GFCF) at 15% in 2021-22 to achieve full recovery of pre-pandemic level, said Mr Pradeep Multani.
Though the country had a fairly high fiscal deficit even before Covid-19, which worsened during the pandemic, it is motivating to note that Government has the fiscal capacity to maintain the support and ramp up capital expenditure when required on the back of strong revival in revenues, said Mr Pradeep Multani.
The Survey suggests that the high WPI inflation is partly due to base effects that will even out and there is no need of worrying on imported inflation, especially from high global energy prices, said Mr Pradeep Multani.
It is encouraging that RBI’s foreign exchange reserves increased to US$ 634 billion as on 31st December 2021, which is equivalent to 13.2 months of merchandise imports and higher than the country’s external debt. This has been the result of India’s balance of payments that remained in surplus throughout the last two years, despite the disruptions caused by the daunting impact of COVID-19 pandemic, said Mr Pradeep Multani.
The Survey indicates that India has become the third largest startup ecosystem in the world after the US and China, with the number of new recognised startups increasing to over 14,000 in 2021-22 from only 733 in 2016-17, said Mr Pradeep Multani.
It is highly encouraging to note that the confidence on markets, corporate sector performance and prospects of the economy in the long run are significantly high and visible through the tremendous response by all categories of investors in IPOs of companies, said Mr Pradeep Multani.
Going ahead, we look forward to a vibrant growth oriented budget which ensures a great focus on refuelling the consumption demand, private investments and employment creation through ensuring hassle free credit availability to industry, particularly for MSMEs, improving ease of doing business for the MSMEs, reducing costs of doing business, creating level playing field for the industry and timely justice for people and industry, said Mr Pradeep Multani.
Warm Regards Media Division PHD Chamber of Commerce & Industry