India not to miss 11.1% nominal GDP growth in FY23, says Bibek Debroy

Bibek Debroy, chairman of the economic advisory council to the prime minister (EAC PM), said the country will achieve the 11.1 per cent nominal economic growth rate assumed in the Budget despite the tense geopolitical situation.

“I don’t think we will miss the nominal GDP growth rate envisaged in the budget. Yes, right now the geopolitical situation is somewhat maligned. In this situation, India is relatively one of better performing countries,” Debroy told reporters on the sidelines of the release of a report, titled Competitiveness Roadmap For India@100.

He reminded reporters that he had said at the time of the Budget presentation that it was slightly conservative in terms of its growth assumptions. “It could have been a tad higher,” he said.

The Budget assumed the economy to grow to Rs 258 trillion in nominal terms during 2022-23, against Rs 232 trillion in the previous year.

Many experts called it a conservative assumption.

In fact, the monetary policy committee (MPC) of the Reserve Bank of India also expected the economy to grow by 13.9 per cent during the current financial year.

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The GDP data for the first quarter of the year is slated to be released on Wednesday. Most experts expect the economy to have grown by 12.5-15 per cent in real terms during the quarter, lower than MPC’s projection of 16.2 per cent.

During his address on the occasion, Debrohy said the Indian economy’s size will touch little less than $20 trillion by 2047 even if one assumes a conservative annual average real GDP growth rate of 7-7.5 per cent in the next 25 years. In such a case, the country’s annual per capita income will be about $10,000.

That way, India will become an upper middle income country when it celebrates its 100th year of independence, even on the assumption of conservative economic growth rates, he said.

“The question to ask is what needs to be done to increase our per capita income from $10,000 to $12,000 by 2045 and increase the annual real GDP growth rate to 8-8.5 per cent to make India a high income country,” he said.

According to him, India will also be among high human development category countries by 2047. India, which is the world’s sixth largest economy with a GDP of $2.7 trillion, is currently classified as a developing nation.

Debroy said when one talks of 25 years down the line, one naturally expects these temporary tensions (at geo political level) to ease.

“So independent of this report, I would say by 2047 whether in terms of development indicators, whether it is in terms of poverty reduction, whether it is in terms of increase in employment, the moment you begin to look beyond the immediate concerns of uncertainty, the prospect is very bright,” Debroy asserted.

Prime Minister Narendra Modi has set an ambitious target of making India a developed nation by 2047. A developed country is typically characterised by a relatively high level of economic growth, a higher standard of living and per capita income. Such economies also perform well on the Human Development Index (HDI) on parameters such as education, literacy and health.

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