Page 5 - CII Artha Magazine

Message From Director General

Chandrajit Banerjee, Director General, CII

T The Indian economy has remained Encouragingly, inflation, which had adopt a wait and watch approach before

remarkably resilient over the last
emerged as a big challenge post the war
making changes to its monetary policy.
three years, despite the uncertain global in Ukraine, has now moved within the Heightened global financial market
backdrop. No doubt, the spill overs from RBI’s target band of 2-6 per cent, with volatility and consequent implications on
global shocks, which are impacting the the CPI print at 5.7 per cent for March commodity prices and currencies
supply chains resulting in a slowdown in 2023 and further moderation expected continue to linger, which can have a
growth and elevated commodity prices, in the months ahead. The average CPI bearing on imported inflation.
is a matter of concern. Nevertheless, our inflation for FY23 came at 6.6 per cent
economy has done much better than compared to 5.5 per cent last year. In Further risks to the domestic growth
many large economies, driven by robust the wake of risks to growth amidst outlook can also emerge from the
domestic consumption, digitisation some positive signs on the inflationary possibility of El Nino, even while
initiatives, food security and robust front, the RBI, in its latest monetary on monsoon has been forecasted as
regulatory system for the financial 6th April 2023, decided to keep the ‘normal’ this year. We need to be
sector. A conducive domestic policy policy repo rate unchanged at 6.5 per cautious of the geopolitical
environment along with government’s cent and let the lagged impact of the developments and the impact of muted
focus on structural reforms have kept cumulative hike of 250 bps, effected so global growth on the domestic economy.
India’s economic activity robust. far, to work through the system.
While the aforementioned factors could
The current growth momentum in the It is fair to say that the easing of lead to some moderation in growth in
economy remains strong, as confirmed international commodity prices the current fiscal, there is optimism that
by several key macroeconomic notwithstanding tighter supply by India’s increased macro stability will help
indicators such as GST revenue OPEC+, promptness of measures taken sustain the growth momentum going
collection, which has touched the by the government and the RBI have forward.
highest ever at 1.87 lakh crore in April helped to rein in domestic inflation.
2023, robust automobile sales, Further, inflation expectations also
impressive air passenger traffic, high appear to be anchoring as recorded in
manufacturing PMI, reflecting an surveys of households and businesses.
improvement in industrial and
commercial activities. The financial However, the recent banking turmoil in
sector too has remained robust with the advanced nations has clouded the
bank credit growing in double-digits global economic outlook, prompting Chandrajit Banerjee
despite monetary tightening by the RBI. many central banks, including the RBI, to Director General, CII

ANALYSIS, RESEARCH, THOUGHT LEADERSHIP & ADVOCACY 05
QUARTERLY JOURNAL OF ECONOMICS
MAY 2023