India to grow at over 7% in FY23, says CEA

Chief economic advisor V Anantha Nageswaran on Tuesday said Indian economy will grow at over 7 per cent, down from above 8 per cent of growth rate projected in January.

He, however, said that the economic momentum and the animal spirits are "unmistakable".

"India's own growth rates have come off the projections made in January down to about 7-plus per cent for the current financial year," Nageswaran said speaking at Global Fintech Fest event in Mumbai.

He said the world is still undergoing the aftereffects of Covid pandemic and the ongoing war in Europe triggered by Russia's invasion of Ukraine, suggesting that these factors are hurting growth.

The economic survey released before the annual budget in January this year has estimated FY23 growth to come at 8-8.5 per cent.

The RBI has estimated the GDP to grow at 7.2 per cent, but some analysts have said that there will be a downward revision of the estimate soon.

Nageswaran said India is well-poised to sustain the 7 per cent growth per year during the remainder of the decade as well.

Speaking at the event on fintech, Nageswaran said the government is moving from financial inclusion to financial empowerment and the focus in the decade to 2030 is on helping people access financial services like credit and insurance using the base of the accounts opened earlier.

He said with the aim of taking remittance charges to near-zero, the government is working to help establish interoperability between payment systems in Singapore and the UAE to help the diaspora.

He said the unified payment interface "mimics" the soon-to-be-introduced central bank digital currency, on which India is moving ahead.

On the credit front, "we are moving from the collateral based system to the one where cash flows come into essence", he noted.

However, there is a need for the cash flow based lending apps to not abuse the borrowers, especially the ones who are not so high on financial literacy, he said.

Nageswaran estimated the overall opportunity on the cash flow-based lending to be Rs 3 lakh crore in the next year.

He also said that there is a need for the data protection law.

Companies should look at profit as a means to innovate and not abuse the system, he said.

India also needs to move forward on the challenges on the intellectual property front, he said, noting that the country has now created a slew of solutions after being just a consumer for many years.

There is a lot of interest among G-20 grouping to understand the Indian model of partnering with the private sector for better systems, he said.