The Indian economy is expected to navigate rough global weather with resilient consumer demand in 2023 with a clearer glide path of private investment and abating of inflation, industry body Assocham has said. It said 2023 is going to be full of challenges and opportunities, testing the resolve of the people and nations.
“While the global outlook seems rather tough, the Indian economy is set to stay on a steady ground, helped by a strong domestic demand, healthy financial sector and improved corporate balance sheets. Early signs of brighter prospects of Rabi crops point towards a robust performance of agriculture, leaving an improved second round effect for several connected industries like FMCG, tractors, two-wheelers, speciality chemicals and fertilisers,” Assocham Secretary General Deepak Sood said in his new year’s message of expectations and challenges.
He said that while there is an overwhelming consumer response in contact services like travel, hotels and transport, a positive domino effect is visible in transport, housing, power, electronics, discretionary consumer goods and automobiles.
“Our domestic demand is bound to offset the risk of global demand slowdown,” Sood said adding that however, “we need to be watchful about international currency fluctuations, particularly in the emerging economies”.
He said as per the recent assessment shared by the Reserve Bank of India (RBI), the global economy is projected to grow by a mere 2.7 per cent even as some of the key developed economies face recession, being exasperated by their central banks’ policies of monetary tightening. To an extent, the impact of higher interest would be reflected in the balance sheets of Indian corporates as well. However, the corporate sector is expected to continue with the policy of deleveraging, taking advantage of a resilient stock market and reversal in commodity prices.
“Despite global head winds including recession looming large in several economies, unabated geo-political situation, inflation, India is set to register an economic expansion between 6.8-7 per cent in the financial year 2022-23. Going forward, FY ‘2024 should hold steady,” the Assocham secretary-general said.
He said that being the last regular Budget (2023-24), it is going to drive investment in several infrastructure projects like roads and rails, rural infrastructure like housing, drinking water and welfare schemes. ”All this would provide an impetus to the growth momentum”.
As far as the fiscal situation is concerned, robust tax revenue to be further enabled by improved compliance and economic growth should provide a cushion. For the ninth consecutive month the GST collection has crossed Rs 1.40 lakh crore per month.
”The positive message is: the year 2023 is going to be full of challenges and opportunities,” Sood said.
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