Chief Economic Advisor V. Anantha Nageswaran on Monday advocated that “pragmatism has to be the policy mantra” and all policy approaches must be pursued to maintain a medium-term growth rate of 7% and become a Viksit Bharat, or a developed economy, by 2047.
The Economic Survey 2023-24, tabled by Finance Minister Nirmala Sitharaman in Parliament on Monday, has pegged India’s GDP growth rate at 6.5% to 7% for this fiscal year. The survey indicates that the economy can grow at 7% or more on a sustained basis if the structural reforms undertaken over the last decade are built upon.
“This requires a tripartite compact between the Union Government, State Governments, and the private sector,” it said.
Addressing reporters later in the day, Nageswaran, who is the key author of the report, underlined the need to do the “grunt work,” the “nuts and bolts,” and undertake the “plumbing of governance to drive forward this growth.”
“Going forward, the government’s focus must turn to bottom-up reform and the strengthening of the plumbing of governance so that the structural reforms of the last decade yield strong, sustainable, balanced, and inclusive growth,” the Survey highlighted.
The Survey listed key policy focus areas in the short to medium term, including generating productive employment, addressing the skill gap challenge, tapping the full potential of the agriculture sector through reforms such as land consolidation, addressing MSME bottlenecks, managing India’s green transition, dealing deftly with the Chinese conundrum, deepening the corporate bond market, tackling inequality, and improving the quality of health for the young population.
On the growth outlook for the current fiscal year, which is lower than the 7% estimate presented in late January as well as forecasts by several private agencies, the CEA said that the Survey is not pessimistic but remains very optimistic about growth while being mindful of the current set of challenges.
The Survey highlighted several risks, including the ongoing monsoon rains, the global environment and geopolitical risks, potential corrections in financial markets that could impact household finances and corporate valuations, and the election outcome in the US and its implications for global trade and investment.
However, the economy has surpassed the pre-pandemic level of GDP growth and is poised to remain the fastest-growing major economy in the world.
“Domestic growth drivers have supported economic growth in FY24 despite uncertain global economic performance. Improved balance sheets will help the private sector cater to strong investment demand,” it said, adding that structural reforms such as the GST and the IBC have matured and are delivering the envisaged results.