IGI Logo

Chief Economic Adviser (CEA) V Anantha Nageswaran has stated that the economic situation is likely to improve in the current financial year. Nageswaran expressed hope that the private sector is expected to accelerate capital expenditure from the second half of the current fiscal (H2FY23). The investment from private sector has been muted for past many years despite several measures, including corporate tax cut, taken by the government to reinvigorate it.

He mentioned ‘Bank credit is beginning to pick up especially in MSME sector. Therefore, I think probably by the end of the second quarter or in the second half of the year, private sector picking up the baton of capital expenditure... sooner rather than later Indian private sector will pick up the capital expenditure baton and run with it.’ Further, he said an RBI survey has shown a jump in capacity utilisation by the industry from 68 per cent to 74 per cent. He added the top four firms in several sectors are already operating over 80 per cent capacity.

Besides, he said ‘The robust state of balance sheet within private sector would enable the Indian economy to weather the current twin storm -- geopolitical and Fed Reserve tightening. As we head toward the second half of 2022-23, blue sky will reappear and we can look ahead to a decade of India repeating in a more sustainable form, the kind of high growth we experienced between 2003-2012.’ Moreover, if the oil prices persist beyond USD 100 per barrel for a longer period, he said, probably GDP numbers may have to be revived downward.