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The Economic Advisory Council to the Prime Minister (EAC-PM) has said that India’s Gross domestic product (GDP) is likely to grow by 7 - 7.5 percent in the next fiscal year (FY23). It said this should not mean that the Union Budget for 2022-23 should project unrealistically high tax revenue or tax buoyancy numbers.

It said other than an element of the base effects, the contact intensive sectors and construction should recover in 2022-23. Once capacity utilization improves, private investments should also recover. It noted that the Union Budget for 2021-22 was applauded because of reform measures, as well as transparency and realism in the numbers.

It said EAC-PM members were of the view that these dimensions should be carried forward into the 2022-23 Budget too, signalling use of the extra revenue in the form of capital expenditure and human capital expenditure, since Covid has led to a human capital deficit. It added that there should also be a clear roadmap for privatisation and the growth orientation of last year's Budget should also be maintained.