Notwithstanding the second wave of COVID-19, Chief Economic Adviser (CEA) K V Subramanian on Monday expressed hope that economic growth during the current financial year would be around 11 per cent as projected in the latest Economic Survey.
He also said the overall impact of the second wave on the economy will not be very large.
"We will be in that ballpark," Subramanian said when asked if the Economic Survey's target of GDP growth will be met in the backdrop of the second wave of the pandemic.
The Economic Survey 2020-21, released in January this year, had projected GDP growth of 11 per cent during the current financial year ending March 2022.
The Survey had said growth will be supported by supply-side push from reforms and easing of regulations, push for infrastructural investments, boost to manufacturing sector through the Production-Linked Incentive (PLI) schemes, recovery of pent-up demand, increase in discretionary consumption subsequent to rollout of vaccines and pick up in credit given adequate liquidity and low interest rates.
"We will grow at a high growth rate this year. This year growth will be from the lower base but we anticipate 6.5-7 per cent growth next year FY'23 and from thereon, growth accelerating even further," he said.
Growth will be aided by various structural reforms, including labour and farm laws, undertaken by the government, he said while addressing an event organised by the Indian Construction Equipment Manufacturers' Association.
Recalling the various seminal reforms introduced in 1991, he said they propelled Indian economy to a high-growth trajectory.
Subramanian also said future growth would take place without runaway inflation as India has removed various supply-side friction points through structural reforms during the pandemic.
With regard to meeting the Budget target, he said infrastructure spending announced will be met and the finance minister exhorted various PSUs to frontload their capital expenditure plans.
The Union Budget for 2021-22 has provided a capital outlay of Rs 5.54 lakh crore, an increase of 34.5 per cent over the Budget Estimate of 2020-21.
The Budget estimate of capital expenditure for FY2020-21 was Rs 4.12 lakh crore.
