New Delhi, Nov 18 (PTI) The Indian economy is likely to grow by 7 - 7.5 per cent in the next fiscal year, the Economic Advisory Council to the Prime Minister (EAC-PM) said on Thursday, while observing that contact intensive sectors and construction should recover in 2022-23.

In a statement, the EAC-PM however added that this should not mean that the Union Budget for 2022-23 should project unrealistically high tax revenue or tax buoyancy numbers.

Also Read | Lava Agni 5G Smartphone Goes on Sale in India.

"Looking beyond the current year, 2021-22, EAC-PM members were optimistic about real and nominal growth prospects in 2022-23. Other than an element of the base effect, the contact intensive sectors and construction should recover in 2022-23," it said.

The Reserve Bank of India (RBI) has lowered the growth projection for the current financial year to 9.5 per cent from 10.5 per cent estimated earlier, while the IMF has projected a growth of 9.5 per cent in 2021 and 8.5 per cent in the next year.

Also Read | Congress Questions PM Narendra Modi’s Silence on ‘Chinese’ Villages Coming Up Near Dokalam Plateau.

"Once capacity utilization improves, private investments should also recover. Therefore, Members felt a real rate of growth of 7 to 7.5% in 2022-23 was likely," the statement said.

It noted that 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," it added.

According to the statement, there should also be a clear roadmap for privatisation and the growth orientation of last year's Budget should also be maintained.

A meeting of the EAC-PM was held in Delhi on Thursday.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)