The Finance Ministry on Wednesday said that India will touch the fastest growth rate among large nations in 2022-23 with growth being stable across sectors and on the back of various initiatives taken by the government in the budget.

The department of economic affairs released its monthly report which said, “The current year may as well end with an economic reset manifest of a post-COVID-19 world. Manufacturing and construction will be the ‘growth drivers’, triggered by the PLI schemes and public capex in infrastructure.”

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The review added that agriculture, which continues to see a constant increase in net sown area and crop diversification, will strengthen food buffers while benefiting farmers through generous procurement volumes at remunerative minimum support prices and through income transfers like the PM KISAN scheme.

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Regarding India’s growth forecasts being lowered by international rating agencies and multilateral bodies, the report said the International Monetary Fund (IMF) in its January 2022 update has lowered its global growth estimate for 2022. Yet India is the only major country listed by the IMF whose growth projection has been revised upwards in 2022-23.

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As testimony to the resilience of its people and the farsightedness of its policymaking, the Indian economy that contracted by 6.6% in 2020-21 is now projected in 2022-23 to grow the quickest among the league of large nations, the DEA report said.

The capex budget 35.4% higher than the current year’s budget projections and rising to 4.1% of GDP after the announcement of grants-in-aid to states for capital works will power the seven engines of Gatishakti to reduce the infrastructure gap and support private investment in the country.

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The monthly review said during the third wave of COVID-19, overall economic activity remained resilient and this is reflected in the robust performance of several high-frequency indicators like PMI manufacturing, power consumption, exports and e-way bill generation.

On rising inflation, the report said inflation for the present year will close within its tolerance range of 4+2%. The RBI’s Monetary Policy Committee has maintained its inflation forecast for 2021-22 at 5.3%.

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The Budget has projected nominal GDP growth of 11.1% in 2022-23 with a GDP deflator of 3.0-3.5%. The implied real growth component of just about 8% is close to the projection in the Economic Survey as well as 7.8% projected by the RBI’s MPC in its meeting in February.

The retained repo and reverse repo rates along with the MPCs accommodative stance will prioritise growth during these uncertain times and reinforce the investment orientation of the budget, it added.