Economy To Grow 10.5% In Current Fiscal, 7-7.5% In 2022-23

The economic advisory council to Prime Minister Narendra Modi expects the country's growth to range between seven per cent and 7.5 per cent in the next fiscal year and that the next budget should have a clear roadmap for privatising the state-owned assets.

The government expects the economy to grow 10.5 per cent in the current fiscal year, following a record contraction of 7.3 per cent last year due to the COVID-19 pandemic.

The seven-member council said in a statement on Thursday that the contact intensive sectors and construction should recover the financial year 2022-23.

Recent economic indicators such as tax collection, export growth, retail sales, and power demand point towards a better than expected recovery, leading some economists to revise India's growth projection upwards.

The advisory council cautioned that the country's 2022/23 budget should not have unrealistic revenue targets and that it should include plans to spend any extra revenue to build assets. The council members were of the view that extra revenue in the form of capital expenditure and human capital expenditure could be utilised since the pandemic has led to a human capital deficit. 

Last year, Finance Minister Nirmala Sitharaman announced a plan to privatise a slew of state-owned companies such as refiner Bharat Petroleum and the Shipping Corporation of India. Recently, the government also announced the sale of national carrier Air India to the Tata group.

"There should also be a clear road-map for privatization and the growth orientation of last year's budget should also be maintained," the council said in its meeting today.