CEA says India's 2023 GDP growth was 7.2 per cent, surpassing expectations

The Chief Economic Advisor to the Government of India, Dr V Anantha Nageswaran, on Monday said the real GDP growth for the year ending March 2023 was 7.2 per cent, which surpassed expectations, as the underlying momentum in the economy was quite strong.

During an interaction with the Industry, organised by the Associated Chambers of Commerce and Industry of India (ASSOCHAM) here, Nageswaran explained the current state of the Indian economy and said the government was optimistic about its medium-term performance.

Addressing the gathering, he said while goods exports were on the weaker side in 2022-23 due to the war in Ukraine and oil price rise, services exports did very well for the country.

"We have a good story to share about the Indian economy. The real GDP growth for the year ending March 2023 was 7.2 per cent, surpassing expectations. The underlying momentum in the economy is quite strong. We expect the final number to be even higher than 7.2 per cent," Nageswaran said.

He pointed out that the data shows that India's 4th quarter GDP of 6.1 per cent was actually much better than several other countries at this point.

Talking about the wholesale price index's deduction, he said it was not a drawback nor a drag on growth but "it is actually going to lower input cost for our businesses as well".

"The Wholesale price index is coming down because of the slowdown in oil prices and the slowdown in food prices and in fact it is now negative. So people think when the wholesale prices come down, it may lead to a slowdown in GDP growth. Yes. We are expecting 6.5 per cent GDP growth which is lower than last year's 7.2 per cent. But that is the trend growth that India will continue to achieve. In fact this number can be higher if the export sector also performs, but that is going to be a challenge," he said.

The CEA acknowledged that merchandise export growth was something which needed continued efforts to maintain in order to keep our market share or gain the market share.

"That's where the industry has to invest in R&D, has to do better marketing etc and diversify our product range and focus on quality. It's going to be a hard grind for the rest of the decade because global growth is not going to be very strong in the rest of the decade but services sector growth is surprisingly doing well for us because many companies now rely on India not only for IT enabled services," but others as well, he said.

Global companies rely on India even for accounting, risk management compliance, back office work and their dependence on India through global capability centres (GCC) have become much wider, he added.

He claimed that macroeconomic management in India has been prudent during pandemic when compared to other advanced nations.

"The overall macroeconomic management in India has been prudent and sensible, avoiding overstretching ourselves during the pandemic. This has contributed to our stable growth and inflation management," he said.

Nageswaran said while the country has made significant strides, "we must remain vigilant and continue our efforts" towards growth and development.

"While progress has been made, there is still work to be done," he said.

He pointed out that there are nearly one lakh recognised Startups in India out of which over 43,000 are led by women.