India’s gross domestic product (GDP) is expected to have grown nine per cent in the financial year 2021-22, which is the highest among the leading economies, and the growth is likely to be over eight per cent in the current financial year, according to the PHD Chamber of Commerce and Industry. “India’s growth trajectory is expected to remain steady in 2022-23, supported by various dynamic reforms undertaken by the government during the past two years,” Pradeep Multani, president of PHD Chamber of Commerce and Industry, said in a statement on Monday.
He added that among the major worrying factors in 2022-23 are geopolitical conflicts, high inflation and renewed coronavirus variants. “At this juncture, the percolation of ease of doing business at the factory level would go a long way to enhance the size of the economy to USD 5 trillion by 2026-27.”
Industry body PHDCCI in its report, titled ‘Economy to Resume Normal Growth Curve in 2022-23’, envisaged that the nominal GDP will grow at 12-12.5 per cent (8 per cent real GDP and 4-4.5 per cent inflation) in the current financial year and the economy will attain a size of USD 3,350-3,400 billion in 2022-23.”
The size of the economy is expected to touch USD 5 trillion by 2026-27, said the report adding that the agriculture and food processing sector has emerged as one of the most prominent sectors to achieve the goal. “The sector is growth promising both in production and exports.”
The nominal GDP is expected to grow at more than 12 per cent (average) in the next five years, said the report. However, the inflation scenario has been stoked by rising international commodities prices particularly crude oil prices.
Multani said Indian economy is expected to remain resilient despite geopolitical conflicts that are likely to undermine the world GDP growth by 0.5 percentage points. This is due to the Indian economy’s “inherent strengths, strong economic fundamentals and growth promising sectors”.
The industry body has suggested a 10-prolonged strategy to strengthen the economic growth and to achieve USD 5 trillion in the next five years by 2026-27.
The report said that refuelling of consumption demand will have a multiplier effect on production possibilities, private investments and employment creation. “Accommodative policy stance should be continued by the RBI to strengthen the growth till it becomes more strong and sustainable.”
It added that speedy infrastructure investments give a multiplier effect and the robust growth of infrastructure is the key ingredient to realise the vision to become Atmanirbhar Bharat.
“PLI scheme will become more robust — more and more sectors should be covered under the PLI scheme. PLI scheme has to be instrumental in accelerating domestic manufacturing capabilities and strengthening economies of scale,” it added.
Level-playing field for the Indian industry should be focused on the competitiveness of enterprises. Free-trade agreements must be looked into the scenario of market access opportunities in the destination economies.
It said that the economy should be supported with continued reforms for the businesses, particularly for the MSMEs and agriculture sectors.
It also urged the government to increase public investments in the agriculture sector, address the high commodity prices and shortages of raw materials, reduce the costs of doing business, and decriminalise minor offences.
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