The finance ministry says India's economy is right on course to achieve 8-8.5% GDP growth in the first quarter of the current fiscal. A sustained growth momentum can be seen across several high-frequency indicators, says the Centre.

"Since then, sustained growth momentum has been observed in several High-Frequency Indicators (HFIs), indicating that the projected growth path is on course in the first quarter of FY2022-23," says the minister of state for finance Pankaj Chaudhary, in a written reply to Rajya Sabha.

The finance ministry's latest views reflect its observations in the latest monthly economic report for June. In this report, the ministry says economic activity is holding up "better than expected". This has happened at a time geopolitical tensions are high, interest rates are on the rise in the U.S. and in India, and the prices of crude oil and a few other commodities are elevated.

"The services sector recovery is continuing and manufacturing strength is steady. There is an apparent keenness to invest on the part of the private sector. Banks are willing to lend and their financial health, as the central bank’s stress tests reveal, is quite strong. Brisk GST receipts monthly confirm the momentum in the economic activity," it adds.

According to the ministry, June and the first 10 days of July were better for Indian macro economy as compared to the first two months of the current financial year. "That is some cause for relief and even cautious optimism in these times," it adds.

Regarding inflation, the government thinks recent moderation in global food, industrial metals and even crude oil prices is a relief for India’s inflation control.

India's retail inflation moderated to 7.01% in June 2022 from 7.04% in May but it’s the sixth straight month when it remained above the RBI’s tolerance band of 4-6%. The RBI now thinks inflation may have peaked and could be back in its target band in two years.

The minister, meanwhile, says the government has taken a series of measures to rein in inflation, which include excise duty cuts on fuel and aviation turbine fuel. Further, the RBI's monetary measure in this fiscal so far (90bps repo rate cut) will also help the economy, he adds.

He also says the Centre is monitoring the global commodity price situation. Notably, the Economic Survey tabled in Parliament in January had also projected India's real GDP at 8-8.5% in FY23. Global body IMF (International Monetary Fund) had also estimated India to grow at 8.2% in FY23.

However, on July 17, Morgan Stanley, the U.S. investment management and financial services company, said India's GDP would grow at 7.2% for the financial year 2022-23. Morgan Stanley’s projections are in line with the Reserve Bank’s estimates for FY23, which said India would grow at 7.2% for FY23.

Previously, several ratings agencies and financial institutions had also slashed India's growth projections due to the global downturn amid supply-chain stocks and high inflation. The World Bank last month trimmed India's GDP growth forecast for FY23 to 7.5% from 8%. Paris-based financial organisation OECD said India's real GDP will grow by 6.9% in FY23 and 6.2% in FY24, as the country’s economy loses momentum due to high inflation, and rising global energy and food prices.

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