India Needs Slowing Global Growth to Boost its Economy, Says CEA Nageswaran

Chief Economic Advisor V Anantha Nageswaran on Thursday said almost all the risks to India’s growth scenario come from external factors and pointed out that a slowing global growth rate is exactly what India needs to boost its economic growth.

In an interview with CNBC-TV18, the CEA said that the government is aware there has to be Good & Services Tax (GST) 2.0 and highlighted the average GST collected per month has been increasing steadily.

“Slowing global growth is what a doctor would order for India. Almost 100% risk to our growth scenario comes from external factors. The entire monetary policy tightening and dollar movement will have an impact on us. At this time external factors will shape or impact our numbers. we are competitive in terms of ensuring supply chain resilience,” he said.

Nageswaran said states are absorbing 80% of interest-free loans based on revised estimates. “The states’ combined fiscal deficit is around 2.2%. States are doing their bit. Some states are spending far more in the capital in comparison to Centre, in general, states are recovering,” he added.

Finance minister Nirmala Sitharaman presented Budget 2023 and announced big relief for taxpayers and a mega push for capital spending and infrastructure.

Welfare spending will rise, including providing all households with piped water and health insurance for the poor, and the finance minister extended a scheme distributing free food grains to about 80 crore underprivileged Indians.

“Our vision for the ‘Amrit Kaal’ includes a technology-driven and knowledge-based economy, with strong public finances and a robust financial sector. To achieve this ‘jan-bhaagidari’ (public participation) through ‘sabka saath, sabka prayaas’ (efforts by all) is essential,” Sitharaman said in her speech.

Sitharaman listed seven priorities — Saptarishi — of Union Budget 2023: inclusive development, reaching the last mile, youth power, financial sector, green growth, unleashing potential and infrastructure and investment.

The Budget made a much-awaited mega announcement on increasing the income level up to which no income tax is payable: Rs 7 lakh a year from the 2023-24 financial year. It was Rs 5 lakh so far. But there is a caveat: this change is only for those who choose the New Tax Regime.

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