The Economic Advisory Council to the Prime Minister estimated economic growth to be 7-7.5% in 2022-23 and was confident that once capacity utilisation improves, private investments should also recover.
But it cautioned that this should not mean that the Union Budget for 2022-23 projects unrealistically high tax revenue or tax buoyancy. The members of the EAC-PM were of the view that the Union Budget for 2021-22 was applauded because of the reform measures, as well as the realism in the numbers.
“EAC-PM members were of the view that these dimensions should be carried forward into the 2022-23 Budget too, signalling use of the extra revenue in the form of capital expenditure and human capital expenditure, since Covid has led to a human capital deficit,” according to a statement, adding that, members were optimistic about real and nominal growth prospects in 2022-23. Other than an element of the base effect, the contact intensive sectors and construction should recover in 2022-23.
The members were also of the view that there should be a clear road-map for privatisation and the growth orientation of last year’s Budget should also be maintained.