"Other than an element of the base effect, the contact intensive sectors and construction should recover in 2022-23. Once capacity utilization improves, private investments should also recover. Therefore, Members felt a real rate of growth of 7 to 7.5% and a nominal rate of growth of more than 11% in 2022-23 was likely," according to an official statement.
However, the EAC said, it should not mean that the Union Budget for 2022-23 should project unrealistically high tax revenue or tax buoyancy numbers. The Union Budget for 2021-22 was applauded because of reform measures, as well as transparency and realism in the numbers.
EAC-PM Members were of the view that these dimensions should be carried forward into the 2022-23 Budget too, signalling use of the extra revenue in the form of capital expenditure and human capital expenditure, since Covid has led to a human capital deficit.