Prudent to estimate GDP growth at 7.8-8% at present oil price levels: CII President – ET Auto

CII President Sanjiv Bajaj

India’s annual gross domestic product (GDP) growth is expected to be in the band of 7.4 per cent – 8.2 per cent depending upon the global oil prices according to the Confederation of Indian Industries (CII).

Responding to a query from ET, newly appointed CII President Sanjiv Bajaj said, “As far as the projections are concerned, as you know, Reserve Bank of India’s own projections are at the lower end of this. We believe that we do have a couple of quarters of stronger growth. Oil is something that is not in our hands in the short term, neither is the length, intensity and negative impacts of the war. So at this stage I would go by a reasonable scenario of around 7.8 to 8 per cent.”

There are three GDP growth scenarios according to a CII presentation, the most optimistic is if oil prices are at $ 90 a barrel which will result in an 8.2 per cent GDP growth for India. In the Business-as-usual scenario, oil prices are at $ 100 per barrel and GDP growth climbs down to 7.8 per cent. The most pessimistic scenario according to CII is if oil prices average at $ 110 per barrel, pulling down growth to 7.4 per cent.

Bajaj said that an immediate measure to moderate inflation could be to moderate taxes on fuel products, which constitute a large share of the retail pump prices of petrol and diesel. “CII would encourage Centre and State governments to collaborate in reducing these duties,” he said.

Spelling out his vision for the economy, Bajaj said that India has the potential to become a $ 40 trillion economy by the time it turns 100, in 2047, with milestones at $5 trillion by 2026-27 and $9 trillion by 2030-31.

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