Optimistic that India will hit 8% growth in FY23, says Former VC of NITI Aayog
Last month the International Monetary Fund (IMF) cut global growth for this year to 3.2 percent and next year's growth to 2.7 percent, which is the slowest in 20 years if you exclude the COVID and Lehman crisis years. IMF has also cut India’s Gross domestic product (GDP) forecast to 6.8 percent for FY23 and to 6.1 percent for FY24. But India still stands as a refreshing growth story compared with most other large economies.
Last month the International Monetary Fund (IMF) cut global growth for this year to 3.2 percent and next year's growth to 2.7 percent, which is the slowest in 20 years if you exclude the COVID and Lehman crisis years.
IMF has also cut India’s Gross domestic product (GDP) forecast to 6.8 percent for FY23 and to 6.1 percent for FY24. But India still stands as a refreshing growth story compared with most other large economies.
So, can India reach a 7 percent growth in a slowing world with fragmenting trade?
Speaking to CNBC-TV18, Arvind Panagariya, Former VC of NITI Aayog and Professor of Economics said that he is optimistic that India will hit 8 percent growth in the current financial year.
“I am quite optimistic about India. My own take is that in the current year (FY23) we would very likely hit 8 percent. Indian growth between 7-8 percent in the decade to come is well within our reach.”
He added that India should allow rupee to depreciate as much as other countries’ currencies.
“The currencies of the other countries have depreciated more than India’s currency. I think we should allow rupee to depreciate at least as much as the competing countries have let it depreciate,” Panagariya added.
According to Panagariya, a lot more needs to be done on manufacturing and labour intensive industries than just production linked incentives (PLIs).
Also Read: Investment is the driver of economy growth, reduction in rate is worrisome, says C Rangarajan
“I am optimistic that perhaps we are in for a renewed investment cycle but I think much more needs to be done on manufacturing. We also need to pay much greater attention to the labour intensive industries,” Panagariya said.
“There has been no foreign investment coming into India in these labour intensive sectors but competing countries like Vietnam and Bangladesh are showing fairly robust foreign investments in these sectors. One of the key things which is very important is the labour laws – we have not notified the new labour codes. So the manufacturing problem has to be solved in order to solve the good jobs problem,” he added.
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