India is now a $ 3.1 trillion economy
Friday 07th January 2022 11:32 AM
India’s economy is expected to grow 9.2% in the current fiscal year, thanks to a robust agriculture sector and a strengthening recovery in manufacturing, construction and service sectors, but the third wave of Covid could hamper expansion in the coming months.
If the 9.2% growth is achieved, it would be the fastest growth since 1988-89, when the economy grew 9.6%. According to the new methodology, the data of which have been available for 17 years, this would be the fastest expansion.
Nominal GDP (including inflation) is estimated at 17.6%. The size of the economy based on current dollar prices is estimated at $ 3.1 trillion.
According to the World Bank, India’s GDP in current dollars rose to $ 2.9 trillion in 2019 before falling back to $ 2.7 trillion in 2020 due to the impact of Covid.
This growth rate would also help it maintain the label of the world’s fastest growing major economy. The economy recovered after the deadly impact of the toughest lockdown imposed to prevent the spread of the coronavirus caused a record 24.4% contraction in the June 2020-21 quarter.
The National Statistics Office (NSO) GDP estimates are slightly lower than those of the Reserve Bank of India (RBI) which forecast the economy to grow by 9.5%. The International Monetary Fund (IMF) also expects it to develop along similar lines.
But the third wave of the pandemic led by the Omicron variant has cast a shadow over the growth and strength of the recovery.
Several economists have lowered their GDP growth estimates for the full year and expect the restrictions unveiled by states to impact businesses and growth in the months to come.
The NSO also warned that the estimate of 9.2% GDP growth in the first advance estimates does not take into account a number of factors and that the impact of government measures could lead to revisions.
“However, these are the first projections for 2021-2022. Actual performance of various indicators, actual tax collections and expenditure incurred on subsidies in the following months, new relief measures for vulnerable sections (such as the free provision of food grains which has now been extended until March 2022) and other measures, if any, taken by the government to contain the spread of Covid-19 would impact subsequent revisions of these estimates, ”the NSO said in its statement.
“The estimate does not take into account the impact of Covid and therefore there may be a downward bias for this number
said Madan Sabnavis, chief economist at Bank of Baroda.
“Based on that number, the RBI will likely keep its previous position and not revise any of the rates. Indeed, the accommodative position will continue and the increase in the repo rate will be postponed. The possibility of lockdowns will ensure the continuation of an easy liquidity policy unless the inflation figure to be published turns out to be very high, which does not seem likely, ”Sabnavis said.
India Business News: India’s economy is forecast to grow by 9.2% in the current fiscal year helped by a robust farm sector and strengthening recovery in manufacturing, con
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