Samvat 2079: Economists evaluate India and growth ahead

The New Year ‘Samvat 2079’ (Hindu calendar) is set to start in a few days. CNBCTV18's Latha Venkatesh talks to four economists — Dr Ashima Goyal, professor at Indira Gandhi Institute of DVPT Research and member of the Monetary Policy Committee; Yamini Aiyar, president and CEO of Centre for Policy Research; Pranjul Bhandari, Chief India Economist at HSBC India and Upasana Chachra, Chief Economist at Morgan Stanley India — to discuss how they see the economy and its macro parameters, and hence its policy priorities in Samvat 2080.

First up, Goyal said that real interest rates do not become too high or too low and real exchange rate stays around the competitive level, which means not too much nominal depreciation.

However, Goyal said the RBI is intervening but it is market-determined. “I would like to flag this issue because there is a lot of hearing about exchange rate depreciations related to the current account deficit and the drawdown of reserves, a lot of the results have decreased because of valuation effects, not because they have been used.”

Meanwhile, Aiyar said that the bigger challenge is coming from agricultural stocks.

“Surveys are showing that rural incomes have suffered. The latest survey coming out by the Azim Premji University, just this week, for National Rural Employment Guarantee Act (NREGA) workers found that incomes dropped between 30 percent and 50 percent among NREGA workers’ households, which is an indication of how much stress there is in the rural economy,” Aiyar said

Talking about exports, Bhandari said that it has grown by 20 percent in real terms between June 2019 and June 2022. “Between June 2019 and June 2022, the GDP growth has grown only 4 percent in real terms, while exports have grown 20 percent in real terms. So exports have been a huge driver of growth and within that, particularly hi-tech exports like IT services, mobile handsets, drugs and farmers, specialised machinery have gained market share, globally, in the last couple of years.”