Page 4 - CII ARTHA India’s Growth Prospects

Message From Director General

Chandrajit Banerjee, Director General, CII

G lobal growth prospects have Government’s increased capex spending risks. External demand scenario is also
especially on infrastructure was cited as
improving with good exports posting an
started to improve as headline
inflation has ebbed in the major the biggest positive for India’s growth in uptick since last few months on the top
developed economies. The latter has the near term, apart from high revenue of service exports already doing well.
raised the possibility of interest rates generation and strong financial markets. With range-bound commodity prices
moving south during the current year to Encouragingly, the Interim Budget which keeping a lid on imports, the current
provide more support to growth. was presented in the first week of account deficit is expected to be
However, geopolitical instability remains February has continued its thrust on eminently under control in this fiscal.
the biggest imponderable to global cushioning economic growth through
growth which became evidently clear step up in capital spending. With an eye Going forward, there is optimism that
from the recent turbulence in a critical firmly on achieving fiscal consolidation, the country would navigate global
trade route which has threatened to the fiscal targets outlined for 2024-25, uncertainties and touch 7.0 per cent
derail the supply chains. signal Government’s intent to achieve growth in 2024-25 as well, on the back
the fiscal glide path. Importantly, the of strong momentum of economic
On the domestic front, the optimism on transparency seen in the successive activity seen in the country. The Reserve
India is at an all-time high, both budgets, by continuing to depend on the Bank of India (RBI) expects India to
internationally and domestically in large gross budgetary support for capex grow at 7.0 per cent and above for four
part due to the government’s proactive rather than on public sector units consecutive years from 2021-22
policies. The latest advance estimates (PSUs), or the internal and external onwards.
which pegged the full year GDP growth budgetary resources (IEBR) route- also
at 7.3 per cent for FY24, took even the referred to as off-budget, is laudable.
optimists by surprise. This sanguinity is
reaffirmed by the latest reading of the The niggling domestic concerns
CII Business Confidence Index (CII-BCI), emanating from factors such as high
which zoomed to an eleven-quarter high inflation are now more-or-less under
of 67.8 in the Oct-Dec quarter of FY24 control, being prone to only intermittent
as compared to a reading of 67.1 in the shocks. The rising spectre of food prices
previous quarter and 67.6 in the same and global commodity price gyrations Chandrajit Banerjee
quarter last year. Specifically, through the year are the major upside Director General, CII

ANALYSIS, RESEARCH, THOUGHT LEADERSHIP & ADVOCACY 05
QUARTERLY JOURNAL OF ECONOMICS
FEBRUARY 2024