December 12, 2021 4:00:16 am
India’s real gross domestic product (GDP), which grew 8.4 per cent in the September quarter and even exceeded the pre-pandemic output level, will likely gain further traction in the remaining quarters of this fiscal, the Finance Ministry said on Saturday.
The strong recovery is evident from 19 of 22 high-frequency indicators in September, October and November, as they crossed the pre-Covid (the corresponding months of FY20) levels, the ministry said in its Monthly Economic Review for November.
The report forecast an annual growth rate of 7 per cent-plus for India until the end of this decade “on the back of a series of second generation and more nuanced structural reforms in the pandemic years of 2020 and 2021”.
RBI has projected 9.5 per cent growth for FY22, implying a 1.6 per cent rise over pre-pandemic (FY20) GDP level. Major multi-lateral and credit rating agencies expect India to grow between 8 per cent and 10 per cent in the current fiscal and in the range of 7 per cent to 10 per cent in FY23.
“India will be among the few economies to rebound so strongly from the contraction last year due to Covid-19,” it asserted. However, the report flagged potential risks from Omicron, a new variant of Covid-19, to the ongoing global recovery. Nevertheless, preliminary evidence suggests that Omicron is expected to be less severe and more so with increasing pace of vaccination in India, it added.
India is among the few countries that have recorded four straight quarters of growth amid the Covid-19 pandemic (from Q3FY21 to Q2FY22), reflecting the ‘resilience’ of the economy.
The good expansion in real GDP in September quarter was “driven by a revival in services, full-recovery in manufacturing and sustained growth in agriculture sectors”.
“The recovery suggests kick-starting of the investment cycle, supported by surging vaccination coverage and efficient economic management activating the macro and micro drivers of growth,” the report stressed.
On the demand side, exports and investment constituted the macro drivers rising by 17 per cent and 1.5 per cent, respectively, over their pre-pandemic levels.
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