Economic affairs secretary Ajay Seth has said that the Budget has taken conservative estimate of nominal GDP growth of 10.5 per cent with some scope for upside for the next fiscal beginning April 1.
In her fifth straight Budget, finance minister Nirmala Sitharaman has projected a nominal GDP growth of 10.5 per cent the next financial year.
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“We feel that that is a conservative number with some scope for an upside, but not very significant upside. For example, in the current financial year we assumed 11 per cent and the actual are 15 per cent plus. So that kind of thing we don’t expect next year. However, with 10.5 per cent we don’t see any downside from that number,” he told PTI in an interview.
With regard to real GDP, Seth said, somewhere upward of 6.5 per cent perhaps may be the number to make assumptions for the next year.
The Economic Survey 2022-23 released earlier this week too projected India’s economy to grow at slower pace at 6.5 per cent in the fiscal year starting April but will remain the fastest growing major economy in the world as it fared better in dealing with the extraordinary set of challenges the globe has faced.
India’s gross domestic product (GDP) growth of 6.5 per cent in 2023-24 compares with an estimated 7 per cent expansion in current fiscal year (April 2022 to March 2023) and 8.7 per cent in the previous year.
On the other hand, he said, “if you would have assumed 11 per cent-plus that would have been in the realm of optimism rather than being conservative. Nominal GDP growth of 10.5 per cent seems doable for the next year.” As far as inflation is concerned, he said, the way global economy is behaving at that point of time, inflation in major economies are showing signs of moderation.
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“We feel that imported inflation to our economy, especially in terms oil, gas, major metals, etc. should see a downward trend. However, there are few imponderables there that is direction of war and hopefully there should not be any economic accident.
“If that were to happen, then it becomes difficult to predict this direction the price movement. All other thing being equal we do expect some amount of moderation to come but not a sharp moderation,” he said.
With regard to the record borrowing planned for the next fiscal, Seth said, what is significant is the net borrowing not the gross borrowing and the net borrowing is of same order for the next financial year as well.
“We don’t see any issue on raising those net borrowing of Rs 11.8 lakh crore from the market,” he said.
The government plans to borrow a record Rs 15.4 lakh crore from dated securities in FY24 to meet its expenditure requirement to prop up the economy.
This is higher than the total borrowing of Rs 14.21 lakh crore for the current financial year ending March 31, 2023.
Finance minister Nirmala Sitharaman while presenting the Budget on Wednesday said the net market borrowings from dated securities are estimated at Rs 11.8 lakh crore to finance the fiscal deficit in 2023-24.
“The balance financing is expected to come from small savings and other sources. The gross market borrowings are estimated at Rs 15.4 lakh crore,” she had said.