INDIA. Mumbai: The Economic Survey of India 2022-2023 tabled by the Union Finance Minister Nirmala Sitharaman in Parliament on Tuesday unveiled the financial status of the country.
The Economic Survey of India 2022-2023
According to the survey, FDI equity inflows in the manufacturing sector decreased between April and September 2022 as a result of the rise in global unease following the Russia-Ukraine war, compared to its earlier corresponding level.
If the global economy does not improve, India’s export growth is projected to remain flat in the upcoming fiscal year. Yet the foreign direct investment into India will rebound in the upcoming months as the country sees high economic growth ahead, the Economic Survey presented a day before the release of the Union Budget 2023 read.
The Economic Survey projected the real Gross Domestic Product (GDP) at 6.5% for 2023-24, the fiscal year 2023-2024, and added that the Government expects monetary and fiscal authorities to remain as proactive and vigilant as they were in the current year.
The survey predicts that the Indian economy will expand by 7% in real terms during the current fiscal year, and it will remain the fastest-growing major economy in the world.
Urban unemployment is at 7%, while the worker-population ratio has increased to 45% as private investment began picking up and the construction sector came back to life.
Private investment in 10 sectors in the first half of 2022-23 was higher than what it was in the first half of 2021-22. The industry and services sectors are registering steady growth. Besides, the credit growth is picking up across sectors, and the credit to MSMEs has grown at ~30% since January 2022.
Besides, the Non Performing Assets (NPAs) in Non Banking Financial Companies (NBFCs) were lower compared to the situation 15 months ago.
With a total outstanding balance of Rs. 31.5 lakh crore as of September 2022, the credit provided by NBFCs was gaining traction. The industrial sector continues to get the highest amount of credit from NBFCs’ balance sheets, followed by the retail, service, and agricultural sector.
As evidenced by Scheduled Commercial Banks’ (SCBs’) double-digit rise in non-food credit offtake since April 2022, the exercise to clean up financial institutions’ balance sheets over the past few years has improved their capacity to lend.
A seven-year low of 5.0% was reached in September 2022 by the SCBs’ Gross Non-Performing Assets ratio (GNPA), which had dropped from 8.2% in March 2020.
The baseline scenario of the RBI’s stress testing methodology predicts that the GNPA ratio will continue to decline and will reach 4.9% in March of this year. 2023. Additionally, starting in March 2021, the Provisioning Coverage Ratio (PCR) has been continuously rising due to the declining GNPAs, reaching a high of 71.6% in September 2022.
Private investment has begun to be stimulated by capital expenditure, and the budget’s objective of Rs. 7.5 lakh crore for the current fiscal year is expected to be achieved.
According to the report, the Ministry of Micro, Small & Medium Enterprises (MSMEs) and Emergency Credit Line Guarantee Scheme (ECGLS) redefinitions have made it possible for the MSME sector to continue to thrive. Evidence of this is the GST that MSMEs have paid.
Despite India’s growth prospects remaining bright, there would be downside risks from bleak global economic prospects. Multi-decadal high inflation forced central banks of various countries to tighten financial conditions, and the impact of such monetary tightening would slow down economic activities in advanced economies, the survey cautioned.
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