India Rating and Research said on Wednesday that India’s GDP could again return to 10.4 per cent in FY 2022. The main reason for this will be the base effect. India Ratings has further stated that the economy will see V-shape recovery on an annual basis but GDP size is unlikely to increase compared to FY 2020.
The agency says that COVID-19 will continue to have its impact on the lockdown economy enforced thereon. However, its effect is diminishing. This report further states that unless moss vaccination and herd immunity turn into reality, the economy is less likely to return to normalcy in sectors that require reciprocal connectivity.
In the Union Budget for FY 2021-22, the government has given priority to growth over the fiscal deficit which was lacking in the self-contained package announced earlier. Given this, India Ratings estimates that the government’s final consumption expenditure in FY 2022 could see an increase of 10.1 per cent on an annual basis.
This report by India Ratings also said that in FY 2022, the final consumption expenditure of the private sector, led by the pharma, healthcare and telecom sector, could see an annual growth of 11.2 per cent.
India Ratings estimates that India’s investment rate could grow by 9.4 percent year-on-year in FY 2022. It will get big support from pride capex. India Ratings also says that in FY 2022, the industrial sector of the country is expected to see an increase of 11.5 per cent and the service sector by 11.4 per cent.
India Ratings says that by looking at the monetary policy, the RBI through various policy measures has been very successful in increasing the liquidity in the economy and maintaining financial stability.
Rating AJC expects the country’s retail inflation to be around 4.3 percent and wholesale inflation around 2.8 percent in FY 2022. Apart from this, India Ratings has also hoped that the RBI will continue to maintain an accommodative stance on the monitoring policy and will not change the rates.