Economic Survey sees FY24 GDP growth slowing to 6.5%

Despite slowing growth, India will still be the fastest-growing major economy

- Dilasha Seth & Subhash Narayan

The Economic Survey on Tuesday projected the Indian economy to slow to a three-year low of 6.5% in FY24, slowing from the estimated 7% growth for the current year due to global economic uncertainty impacting exports.

The Survey, tabled in the Parliament on Tuesday, also forecast a growth range of 6% to 6.8% for the next fiscal year.

Despite slowing growth, India will still be the fastest-growing major economy in the world in FY24, supported by "solid" domestic demand and a pick-up in capital investment amid lingering external economic and political risks, according to the first Economic Survey prepared by a team led by chief economic adviser V. Anantha Nageswaran, who took charge last year.

It pointed out that incipient signs of a new private sector capital formation cycle are visible, aided by the healthy financials of India Inc.

However, the Survey cautioned that the challenge on account of rupee depreciation persisted amid the likelihood of further increases in policy rates by the US Federal Reserve and also flagged that the widening of the current account deficit (CAD) may continue as global commodity prices remain elevated.

The economy is estimated to expand by 7% in the current fiscal compared with 8.7% in 2021-22, according to advance estimates released by the National Statistical Office (NSO) earlier this month.

The Survey expects the Indian economy to grow faster in the coming decade once the global shocks of the pandemic and the Russia-Ukraine conflict, causing a spike in commodity prices, settle.