Government estimates GDP growth at seven per cent this year

NEW DELHI: The government on Friday pegged India’s GDP growth rate at 7% this fiscal compared to 8.7% in the previous year. The first advance estimates of national income released by the National Statistical Office (NSO) projected India’s real GDP growth at 7% to 157.6 lakh crore in 2022-23.This is higher than the RBI’s prediction of 6.8% growth for the current financial year.

Private final consumption expenditure (PFCE) is likely to grow at 7.7% in real terms, while gross final capital formation, which shows capex investment, is likely to grow at a healthy 11.5%. The government consumption expenditure is expected to grow at a moderate 3.11% in FY23.

“The road ahead is not going to be easy so long as PFCE does not recover fully... The household sector, which accounts for 44-45% of the gross value added, saw their nominal wage growth decline to 5.7% during FY17-FY21 from 8.2% during FY12-FY16,” Dr Sunil Sinha, senior director at India Ratings & Research said.

The farm sector is pegged to grow at 3.5% in FY23 compared to 3% in FY22; industry at 4.1%; but manufacturing at just 1.6%. The nominal GDP — GDP calculated at current prices —  would grow at 15.4% to Rs 273 lakh crore. Experts feel the upward revision in nominal GDP has given the government scope to increase fiscal deficit. “The government can increase the fiscal deficit by Rs 97,080 crore, while sticking to the budget target of fiscal deficit at 6.4% of GDP,” said Crisil.

Number crunching

Real GDP for FY23 estimated at Rs 157.60 lakh crore, as against the Provisional Estimate of GDP for
FY22 of Rs 147.36 lakh crore

Nominal GDP in FY23 estimated at Rs 273.08 lakh crore, as against the Provisional Estimate of GDP for the year FY22 of Rs 236.65 lakh crore