India's economy is moving towards a higher growth trajectory and is likely to grow at around 10 per cent in 2021-22, Economic Advisory Council to the Prime Minister (EAC-PM) Chairman Bibek Debroy said on Wednesday. "I am confident that we are on a path towards a higher growth trajectory, higher poverty reduction, higher employment, and a prosperous, more developed and better governed India.
"I think it is, more or less, agreed that the real rate of growth this year (FY2022) is going to be around 10 per cent," Debroy said at an SBI event. At the beginning of FY2021-22, the forecasts for real growth were in the 8.5-12.5 per cent range, he noted.
However, all kinds of high-frequency indicators, including GST revenue, e-way bill, power consumption, vehicle registrations, railway freight, corporate profitability, foreign direct investment (FDI) inflows and steel consumption now instil confidence about the fact that the real rate of growth will be at around 10 per cent this financial year, Debroy said.
For the 2022-23 fiscal, he expects growth likely to be in the 6-7.5 per cent range. According to him, growth and income growth has four drivers - consumption, investment, government expenditure and exports. Of those, three and a little bit of investment are showing fairly robust and broad-based growth. He said the export story in the country looks good at present.
Also, government expenditure has been quite stepped-up. Debroy said with improvement in capacity utilisation, investments are also going to pick up in another six months. He also said that there is a lot of uncertainty around the third wave of COVID-19. However, even if it comes, the impact on economic growth is not going to be very serious due to higher vaccination numbers and a better-equipped medical system.