RBI optimistic of India’s GDP growing in FY24 as rest of the world shrinks

Notwithstanding global slowdown and bank collapses in the US, a Reserve Bank of India (RBI) article on Tuesday took a sanguine view that Indian economy might maintain the current year’s pace of expansion in the next financial year. 

Referring to the forecasts between 6 and 6.5 per cent for the country’s GDP growth for 2023-24, the authors of the article said that the real GDP could go up from Rs 159.7 lakh crore in 2022-23 to not just Rs 169.7 lakh crore in 2023-24, as is being projected, but to Rs 170.9 lakh crore, if Union Budget proposals to boost consumption and investments were implemented.   

The optimistic prediction is based on the assumptions that at least 50 per cent of the Rs 35,000 crore of tax relief proposed in the Union Budget is used by taxpayers for consumption and at least a third of the additional allocation of Rs 3.2 lakh crore budgeted for effective capital expenditure materialses. “Unlike the global economy, India would not slow down – it would maintain the pace of expansion achieved in 2022-23. We remain optimistic about India, whatever the odds,” said the article on the state of the economy, published in the March edition of the RBI Bulletin. 

“The NSO’s end-February data release indicates that the Indian economy is intrinsically better positioned than (those) of the many parts of the world to head into a challenging year ahead mainly because of its demonstrated resilience and its reliance on domestic drivers,” the article added. Even as global growth was set to slow down or even enter a recession in 2023 as global financial markets wagered, India had emerged from the pandemic years stronger than initially thought, with a steady gathering of momentum since the second quarter of the current financial year, it said.

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