Budget 2022-23: Govt likely to target 13-14% nominal growth in FY23

A faster growth projection may cause inflation concerns, say officials

The Union Budget for FY23 is likely to assume 13-14 per cent nominal GDP growth despite the growing inflationary concerns. According to finance ministry officials, the assumption of even faster nominal GDP growth may raise inflationary expectations, giving wrong signals to the market.

For FY22, the Budget assumed 14.4 per cent gro­wth in nominal GDP. But the latest first Advance Esti­m­ates of GDP for the year released by the National Stati­stical Office put nominal GDP at 17.6 per cent, with an implicit GDP defl­ator of 8.4 per cent, signalling that the finance ministry might have underestimated nominal GDP gro­wth for the