V Anantha Nageswaran, chief economic advisor (CEA), on Tuesday said India’s economy will grow at over 7 per cent, down from above 8 per cent of growth rate projected in January, reported PTI. However, he pointed out that the economic momentum and the animal spirits are “unmistakable”.
Nageswaran, who was speaking at Global Fintech Fest, said, “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.” According to the PTI report, he said the world is still undergoing the after effects of the pandemic and the geo-political tensions in Europe triggered by Russia’s invasion of Ukraine, suggesting that these factors are hurting growth.
The economic survey released before the Union 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.
He mentioned that 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.
The CEA 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, while adding that 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 stated.
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.