GDP growth of 6.3 per cent for the second quarter of FY'23 as against 8.4 per cent in the same quarter in the last fiscal has largely been driven by the catch-up recovery in services like trade, hotels and transport in the post-Covid period, while contraction in manufacturing and mining would require a greater push from the RBI and the government, apex chamber ASSOCHAM said today.
"While we believe the fiscal 2022-23 should see an overall economic growth of seven per cent, we could even cross the key threshold if an uplift is extended to manufacturing which has contracted by 4.3 per cent in the second quarter. We expect the RBI Monetary Policy Committee to take a good look at this data point before announcing any further hike in the policy interest rates," ASSOCHAM Secretary General ASSOCHAM Deepak Sood said.
Mr Sood said, "The GDP numbers have to be seen in the overall global context. While most of the large economies are facing a recession threat, India has managed to keep its growth target of seven per cent. Like the rest of the world, India too was confronted with high inflation thanks largely to disruptions in the global supply chain and volatility in energy prices, not to forget strengthening of the US dollar. But a set of fiscal and monetary policies are yielding positive results on the inflation front. On balance, the Indian economy is doing fairly well and we should log in seven per cent or even more for FY '23".
The chamber said the focus should be on manufacturing and mining to bring them back to the growth trajectory , along with construction which moderated at 6.6 per cent. 'With global prices of metals, fuel and other key raw material easing, the manufacturing and construction should witness easing of cost push'. Along with the Centre, states too should scale up their capital expenditure in the remaining part of the current fiscal to keep the growth momentum will cause an investment pull into India and enhance the country's attractiveness to do business.
As regards exports, the shipments should improve with raw material prices dropping and the government lifting some of the domestic restrictions, the chamber noted.