Economic Survey 2023: Digital investments are growth magnet for India, says Chief Economic Advisor

Chief Economic Advisor Venkatramanan Anantha Nageswaran on Tuesday said that India's overall growth will hugely depend on digital investments as they would be the growth magnet in the coming years. Nageswaran, who addressed a press conference on Tuesday after the Economic Survey 2023 was tabled in the Parliament, said there is a lot of justified optimism about India's digital public infrastructure. 

He added that India's robust and growing digital infrastructure can add around 60-100 basis points to India's potential GDP growth rate. 

In his Economic Survey analysis, Nageswaran said on the back of the reforms adopted by the Central government in the last eight years, would guide the country to perform better in this decade. 

“Reforms of the last eight years spanning multiple dimensions including digital, social and physical infrastructure were happening even as banking clean up was going on,” Nageswaran said during the presentation of the Economic Survey on Tuesday.  

He added that the basic recovery of the economy is complete post-pandemic, and the non-banking and corporate sectors now have healthy balance sheets. “The leverage ratio in the corporate sector went very sharply in the first decade of the millennium. The second decade is the payback time, excessive credit growth had to be adjusted for in the second decade. Now, the balance sheets have been repaired and the credit growth is picking up.”  

Earlier in the day, FM Nirmala Sitharaman tabled the Economic Survey, where it said that the economy is expected to grow between 6 per cent and 6.8 per cent in the next financial year starting April 1, down from 7 per cent projected for the current year. The survey said its baseline scenario for growth for 2023-24 was 6.5 per cent. 

Talking about the GDP numbers, Nageswaran said that he is optimistic that the Indian economy is poised to grow faster once the global shocks of the pandemic and Russian-Ukraine conflict, which have pushed the commodity prices, fade away. He added that even IMF is positive about India’s growth. 

“IMF, in its World Economic Outlook Update, has maintained India’s GDP forecast for current FY at 6.8 per cent, next FY at 6.1 per cent and for 2024-25 at 6.8 per cent. Recovery of the economy is complete," he said.

Govt’s quality of public expenditure gone up
CEA Nageswaran said: "The philosophy of economic management revolves around making it easier for people and businesses to pursue their economic activities, leading to enhanced potential for higher growth. It's not just about the government being an enabler, but a partner. Share of private sector investment in agriculture has reached a high level, faciliated by various government initiatives. The sector is no longer about being a primary sector, it has tremendous export potential as well."

"Quality of public expenditure has gone up. The government has become more transparent with Budget deficit numbers. There is increased transparency in public procurement. Various such dimensions have led to improved expenditure management," he added.