India's Economy to Grow Fastest Among Large Nations: Finance Ministry Report

Indian economy to grow, according to Finance Ministry's MER report

(Photo: The Quint)

The Indian economy is guaranteed to grow fastest among the league of large nations hinging on the various initiatives taken in Budget 2022-23, according to the Finance Ministry's Monthly Economic Review (MER) report.

"The current year may as well end with an economic reset manifest of a post-COVID-19 world... Manufacturing and construction will be the 'growth drivers', triggered by the PLI schemes and public capex in infrastructure."

Finance Ministry's Monthly Economic Review

The report also claimed that Agriculture will fortify the food buffers, and benefit farmers through plentiful volumes of procurement at remunerative MSPs and transfers of income through the PM KISAN scheme.

The International Monetary Fund (IMF) in its update of January 2022 had lowered the global growth estimate for the current year. It said that India is the sole major country listed whose projection of growth was revised upwards in FY 2022-23.

What Does the MER Report Say?

"In a testimony to the resilience of its people and the farsightedness of its policymaking, the Indian economy that contracted by (-)6.6 per cent in 2020-21 is now projected in 2022-23 to grow the quickest among the league of large nations," the Finance Ministry said in its MER report for January 22 released on Wednesday, 16 February.

High frequency indicators signal India's economy growing at over nine percent as projected in advanced estimates for the current fiscal.

The Ministry also noted the impact of the third wave of the pandemic, saying that the impact on the economic activities in India has reduced, compared to the first two waves. They reasoned that this is what will help the economy grow.

“India is experiencing the subsiding of the third wave induced by Omicron variant of COVID-19. Although quickest of the three waves to reach the peak, it has been the least fatal thankfully."

The FM report said

It also added that energy prices and global inflation are anticipated to determine the country's rate of inflation.

More Details

With RBI's Monetary Policy Committee holding on to its inflation forecast for FY 2021-22 at 5.3 percent, the inflation for 2022-23 is set to seal within the tolerance band of four percent plus-minus two percent, as stated in the MER report.

According to the MER report, the Union Budget 2022-23 will strengthen the path laid for Indian economy. The Capex budget, higher by 35.4 percent over 2022-23 estimates, and growing to 4.1 percent of GDP after inclusion of grants-in-aid to states for capital works, will empower the seven engines (railways, roads, airports, mass transport, waterways, ports and logistics infra) of PM Gati Shakti to lower the infrastructural gap and enable private investment in the country.

In 2020-21, India's economy had contracted by (-)7.3 percent.

(With inputs from PTI, NDTV and The Indian Express.)