The National Statistical Office (NSO) said in its first advance estimates of economic output released on Friday that India’s gross domestic product (GDP) will grow by 9.2% in the current fiscal year, following a 7.3% contraction in the previous fiscal year, amid concerns about the likely impact of a third wave of the COVID pandemic.
The NSO clarified, however, that they were “early projections” that did not take into account the actual performance of key indicators or potential COVID-19 containment measures.
The NSO stated that “GDP at constant prices (2011-12) in the year 2021-22 is estimated at 147.54 lakh crore, compared to a tentative estimate of GDP of 135.13 lakh crore for the year 2020-21. They add that real GDP growth is expected to be 9.2%. Real GVA at basic prices is expected to reach 135.22 lakh crore in 2021–22, up from 124.53 lakh crore in 2020–21, representing an increase of 8.6%, it added.
Aditi Nayar, chief economist at ICRA Ltd., stated: “The NSO’s implied GDP growth of 5.6% for H2 FY2022 may not fully factor in Omicron’s apparently evolving impact,” “Our opinion is that, after a 6.0–6.5% increase in Q3 FY2022, GDP growth will fall below 5% in the current quarter,” she added.
According to the NSO’s GVA predictions, the mining sector is surpassing others, growing at 14.3% after contracting 8.5% the previous year, followed by manufacturing, which is expected to rise 12.5% after shrinking 7.2% in the previous 12-month period.
The agriculture industry is expected to grow at a rate of 3.9% in FY22 (3.6%). Electricity, water supply, and other utility services are expected to grow by 8.5% (1.9%), construction by 10.7% (-8.6%), and trade, hotels, transportation, communication, and broadcasting services by 11.9%, compared to a sharp contraction of 18.2% last year.
“The early projections anticipate an anemic rise of 1.3% and 1.9%, respectively, for GDP and GVA in FY2022, compared to the pre-COVID performance of FY2020,” Ms. Nayar stated.
The weak performance of private final consumption expenditure and trade, hotel, transportation, communication, and other sectors, which are pegged to trail their FY2020 levels by 2.9% and a significant 8.5%, respectively, underscores the lingering impact of COVID-19 on the Indian economy, she continued.
“These predictions were based on available data up to the months of September to December 2021,” stated D.K. Srivastava, EY India’s principal policy adviser. As a result, the potential negative economic effect of COVID’s third wave may not have been adequately accounted for in our estimations. By the time the second advance estimates are out, another 20 basis points of growth might be taken off of 2021-22 growth, “he added.
Source: The Hindu