The Finance Ministry’s monthly economic review on Saturday said macroeconomic vigilance is needed to ensure sustainable growth and stability amid rising global uncertainties.
The Survey cautioned that the growing focus of advanced economies on energy security in the wake of the ensuing winter months could lead to increased geopolitical tensions, which could test India’s shrewdness in handling energy needs so far.
India imports 85.5 per cent of its crude oil requirements and hence higher prices in the global market have a major impact on the domestic inflation,
“In these uncertain times, it may not be possible to be content and sit back for long. Eternal macroeconomic vigilance is the price of stability and sustained growth,” it said.
At a time when slow growth and high inflation are affecting most of the world’s major economies, it said, India’s growth has been strong and inflation has been under control.
Cautious and prudent financial management and credible monetary policy will continue to be essential to meet India’s growth aspirations, it said, adding that both these pillars of public policy will enable the government and the private sector to reduce benchmark borrowing costs, thereby enabling public and Private facility will be available. sector capital formation.
The vigorous pursuit of asset monetization at all levels of government will help reduce debt stock and hence debt servicing costs, it said.
It said this would reduce the risk premium and improve India’s credit rating and set up a virtuous cycle as the quality of public expenditure rises in view of this and the private sector enjoys lower cost of capital.
“The current financial year has the potential to lay a strong foundation for sustained economic growth, improved resilience and enhanced competitiveness of ‘Made in India’ during the AMRUT period,” it said.
‘Amrit Kaal’ is a term the government often uses to refer to the period between now and 2047 when India will celebrate 100 years of independence.
On the first quarter growth data, the report said, the real GDP in the first quarter of 2022-23, now nearly 4 per cent ahead of its corresponding level in 2019-20, is a strong sign for India’s growth revival. Symbolizes the beginning – the epidemic phase.
The contact-intensive services sector is expected to accelerate growth in 2022-23, based on building on demand reduction and universalisation of immunization, it said, a rapid rebound supported by consumer sentiment and rising employment in the private sector. consumption will increase. Keep up the growth in the coming months.
Growth in private consumption and higher capacity utilization in the current year has further strengthened the capex cycle to take the investment rate to its highest level in the last decade in the first quarter of 2022-23.
It said the rising capital expenditure of the government has also helped in crowding out private investment that till August 2022-23 has been 35 per cent higher than the same level in the previous year.
The government raised capital expenditure (capex) by 35.4 per cent to Rs 7.5 lakh crore for the financial year 2022-23 to continue public investment-based recovery for the economy. The capital expenditure for the last financial year was Rs 5.5 lakh crore.