Addressing the media after the gross domestic product (GDP) data showed a higher-than-projected expansion of 7.2% in FY23, the CEA said private investment is “no longer a prospective story but a current reality”.
The private sector capital formation cycle, he added, has already begun on the back of high capacity utilisation and robust demand. Government investments are beginning to “crowd in private investments”, Nageswaran added. A 20% year-on-year rise in capital goods imports in FY23 and increased domestic production of such goods also signal growing private investments, he said.
“We are very pleased to have been able to present a story of sustained economic momentum combined with macroeconomic, financial and fiscal stability, and we look forward to another year of solid economic performance by India,” he said. The Economic Survey had in late January firmed up a baseline growth projection of 6.5% for FY24 and stated that risks were tilted to the downside.
Nageswaran also said retail inflation may come down to about 4%, the mid-point of the RBI‘s target band, during the course of FY24 itself, aided by an expected moderation in global commodity prices. Retail inflation hit an 18-month low of 4.7% in April. Investment and consumer momentum will underpin solid growth prospects for FY24, Nageswaran said. A pick-up in private sector investments will continue to be supported by the government’s capex push.
The expansion of public digital platforms and measures such as the production-linked incentive schemes, PM GatiShakti and National Logistics Policy will spur manufacturing, he said. Private consumption surpassed the pre-pandemic trend in the third quarter of FY23, aided by increase in pent-up demand. There are signs of recovery in both urban and rural demand, he said, pointing to a traction in many indicators, including rural wage growth and sales of FMCG products and passenger vehicles.