Economy to witness 6.5 -7% growth FY23 onwards, to accelerate further: CEA Krishnamurthy Subramanian

Krishnamurthy Subramanian, CEA, India

The economy will start witnessing a growth of 6.5 to 7 percent from fiscal 2023 onward and accelerate further due to the reforms taken by the government Chief Economic Advisor Krishnamurthy Subramanian said during a virtual event organised by Indian Construction Equipment Manufacturers Association.

"We will grow at a higher rate this year, of course this year growth will be  from a lower base. But next year as I said up by FY23. We anticipate between six and a half to 7 percent," CEA said.

India's GDP had contracted by 7.3 percent in 2020-21.

Subramanian pointed out that unlike most of the country which resorted to demand side measures, India also undertook various supply side reforms like creation of bad bank, privatization of public sector banks, increasing the FDI limit in insurance to 74 percent will push growth in the future like they did after the Liberalisation reforms of 1991.

"Now, the commanding heights of the economy are basically being given to the private sector, with the government to be in only a few select sectors," Subramanian said.

He further noted that with the reforms, the productivity ad return on investment of the assets will increase which were not fully utilised under the government control.

Subramanian also said that the economic impact of the second wave will be not be as large as that of the first wave.

"The restrictions were number one heterogenous in terms of their intensity and asynchronous, in terms of their timing so, you know, they were basically at different times, not every state had restrictions at the same time, and they were different in their intensity as well. And as a result of that economic activity did not get impacted as much," he noted.

He also said that the economic impact of the second wave will be lesser than the first as the duration of the second wave much shorter than the first wave which lasted till September 2020.