Ahead of Budget 2023, UN tells India to 'stay the course, but be cautiously optimistic'
Christopher Garroway, an economist with the UN, said the Indian government's decision last month to end the free foodgrain scheme and provide the benefits under the National Food Security Act for the entirety of 2023 was a good example of a "measured approach".
January 26, 2023 / 06:44 AM IST
Days before Finance Minister Nirmala Sitharaman presents the Budget 2023, India has seemingly got a thumbs-up from the United Nations (UN), asking it to "stay the course" and be cautiously optimistic.
"I would say stay the course, but also be very cautiously optimistic about the future, be realistic in how you commit policy choices," Christopher Garroway, an economist with the UN Resident Coordinator's Office in India, told reporters on January 25.
Garroway was speaking in New Delhi at the release of the UN's World Economic Situation and Prospects 2023 report. In its report, the multilateral organisation cut its GDP growth forecast for India for the calendar year 2023 by 20 basis points to 5.8 percent. However, the downward revisions made for some other countries were much larger.
"I would say that make sure in the Budget, sustainability of the Indian economy, Indian society, and India's ambitious approach to environmental issues stay the course," Garroway further commented on the upcoming Union Budget.
Citing the Indian government's decision last month to end its free foodgrain scheme, the Pradhan Mantri Grib Kalyan Anna Yojana, and instead provide the same benefits under the National Food Security Act for the entirety of 2023, Garroway said it was "a good example of a measured approach".
"Clearly, the amount of money that has been spent on food and fertiliser over the past year will have to go down," he added.
The central government's food subsidy bill in the first eight months of 2022-23 has been Rs 1.48 lakh crore and is expected to rise to around Rs 3 lakh crore for the full year. Meanwhile, fertiliser subsidy over the same period has been Rs 1.52 lakh crore as against the full-year Budget estimate of Rs 1.05 lakh crore.
According to economists, a reduction in food and fertiliser subsidies in 2023-24 will allow the Centre to keep increasing its capital expenditure and help stimulate growth.
Siddharth Upasani is a Special Correspondent at Moneycontrol. He has been covering the Indian economy, economic data, and monetary and fiscal policies for nine years. He tweets at @SiddharthUbiWan.
Contact: siddharth.upasani@nw18.com
