India Inc. expects GDP growth of 7.4-8.2% in FY23
India Inc. expects GDP growth of 7.4-8.2% in FY23
Newly appointed President of the Confederation of Indian Industry (CII) Sanjiv Bajaj said Monday that interest rates are likely to continue to rise, which will to some extent help bring down inflation.
Mr. Bajaj, chairman and chief executive officer of Bajaj Finserv Ltd., added that the industry association expects GDP growth in the range of 7.4% to 8.2% in FY23, with the outlook being “crucially” dependent on developments in global crude oil prices depended
He said global headwinds and inflation must be met with robust policy reforms, both domestic and external, to unlock growth potential in the economy. “Tailwinds supporting growth near-term include government investment, private sector investment showing an upward trend supported by strong demand in some sectors and the PLI surge in others, a good farming season on Good Monsoon expectations and positive export dynamics,” he said during his first media interaction since taking office as CII President.
When asked about inflation, he replied that the rise in inflation has two aspects – the demand side and the supply side. On the demand side, the RBI has started the rate hike cycle and “we should expect rates to continue to rise in the coming year. We would expect clear direction from the RBI on how they will approach interest rates and hopefully we should be able to hear something of that magnitude at the next monetary policy review,” he said.
He added: “On the supply side, a lot of it is oil driven…a lot of supply chain disruptions that are continuing to happen…all of this together…I think we’re in an era of higher interest rates.” This will help us to at least partially reduce inflation.”
Mr Bajaj said various factors, combined with hopes of a strong monsoon, “should put us in a better place in the second half of the year to decide where interest rates and inflation would head”.
One immediate measure to curb inflation could be to lower taxes on fuel products, which account for a large proportion of retail gasoline and diesel pump prices. “CII would encourage the center and state governments to work together to reduce these tariffs,” he added.
He added that India has the potential to become a $40 trillion economy by its 100th birthday in 2047, with milestones of $5 trillion by 2026-27 and $9 trillion by 2030-31.
