Page 5 - CII ARTHA India’s Growth Prospects
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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
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