Domestic rating agency CRISIL on Wednesday estimated FY23 real GDP growth at 7.8 percent, as compared with the 8.5 percent projected in the Economic Survey.
Ind Ra said the government is likely to miss its target, and vaccinating all adults will get spilled over to March but revised upwards the growth forecast. Its principal economist and director of public finance, Sunil Kumar Sinha explained that the recovery in June and July from the after-effects of the second wave of the pandemic has been surprisingly fast, calling it one of the main reasons for the revision.
India Ratings & Research (Ind-Ra) expects banking sector credit growth to hit double digits for the first time in eight years supported by demand for loans from companies to support rising capital expenditure. The Fitch arm expects credit growth to clock 10% in 2022-23 for the first time since 2013-14 when it had hit 14%. It has, however, reduced its estimate for the current fiscal ending March 2022 to 8.4% from 8.9%.
The agency also estimates the national nominal GDP to grow 17.6 percent this fiscal, higher than the previous estimate of 15.6 percent. Accordingly, the agency expects gross and net market borrowings by the states in FY22 to be lower than at Rs 6.6 lakh crore and Rs 4.6 lakh crore, respectively, than its previous estimate of Rs 8.2 lakh crore and Rs 6.2 lakh crore. Their gross and net market borrowings are estimated at Rs 7 lakh crore and Rs 4.63 lakh crore, respectively, in FY23 due to an improvement in states’ aggregate revenue receipts and higher tax devolution from the Centre.
The quality of the fiscal deficit, which is revenue deficit as a percentage of fiscal deficit, is likely to improve in FY22 and FY23, after deteriorating in the previous two fiscals of 2020 and 2021 due to the impact of the pandemic on the states’ revenue receipts. The analysis is based on the information on 26 states during this fiscal till November. The aggregate revenue receipts of these 26 states grew 25.1 percent annualized to Rs 16.4 lakh crore during April-November, while revenue expenditure of these states grew only 12 percent. Against the FY22 budget estimate of Rs 6.65 lakh crore, the Centre has allocated a higher amount of Rs 7.45 lakh crore as the states’ share in central taxes in the revised estimate.