GDP growth of 6.5 to 7 per cent

India's economic growth might have dipped to 6.3 per cent in July-September quarter of this financial year but the good
news is the slide is not going to be as pronounced in the whole year. The year 2022-23 may still end up with GDP
growth of 6.5 to 7 per cent as forecast by India's chief economic adviser V Anantha Nageswaran. This has also been
corroborated by former RBI Deputy Governor and renowned economist Rakesh Mohan, who said recently that if India
achieved 6.3 per cent growth in the second quarter, there is every likelihood of it ending the year with GDP growth of
6.5 to 7 per cent, thereby meaning there is no validity in pessimistic growth projections of less than 6 per cent by some
global rating agencies.
This however does not mean there are no concerns in the economy which require some tough decisions to fix them,
which has become that much more difficult due to worsening global economic environment and geo-political situations.
The comforting aspect of this second quarter growth, as Nageswaran says, is that the economy is on the road to
recovery from the pandemic and is growing faster than other countries.
This also indicated that the economy is on track for 6.8-7 per cent expansion in this fiscal year, though this appears to be
slightly optimistic. At a little over Rs75 lakh crore, India's GDP in the first half of 2022-23 was 5.7 per cent larger than
comparable pre-covid level. So the dream of hastening the process to make India a $ five trillion economy has been pushed
a little further. But none can deny the fact that in the current global economic situation, India is the only bright spot for
sustaining high growth for a decade or two even though it could be bumpy in the immediate term.
Just as Covid provided some opportunity to push digitization, the next couple of years provides a great opportunity
for India to vigorously push job-oriented industries to reverse the jobless growth that a populous India can ill-afford. This
lifted the living standards of the poor and thereby creating self-generating demand to propel the economy.
India still needed to move at least 35 percent of the working age population from agriculture to other jobs. This can be
achieved only through proper skilling and creating jobs in adjacent small town. This can happen only if labour-intensive
industries are set up in semi-urban and rural areas like garments, leather, handlooms, food processing, railway and road
projects.
It is worthwhile to point out that MNREGA programmes, particularly in north and east India are acting as a
disincentive for farm labour to move out of agriculture.
The job creating industries will also ensure that more demand is created thereby encouraging more investments.
Presently the biggest worry for the Indian economy is inflation, which is partly due to global factors.
So this is the right time for the government to push through incentives to encourage labour-intensive industries spread
across the country. Money should not be a problem as banks have adequate liquidity at the moment. With global recovery
still a couple of years away, the government could utilize this time to build the much-needed infrastructure like road, rail and
ports. Another area, which needed to be seriously looked at is tourism.
This too is a labour-intensive industry. India has a huge untapped potential. Huge investments are required in this sector
in cleaning up and beautification of heritage sites dotting all over the country. In sum the economic situation is not as gloomy as
made out to be and if steered well, it could turn out to be India's decade or two.