The UN’s annual World Economic Situation and Prospects report estimated the growth rate of India’s GDP at 9 per cent last year and forecast it to moderate to 6.7 per cent this year and 6.1 per cent next year but still retain the highest growth rates among the large economies, reports Arul Louis
“India’s recovery is on a solid path”, the UN said on Thursday reporting that the country recorded the highest estimated growth rate among the major economies last year and is set to be on the same trajectory during this year and the next.
The UN’s annual World Economic Situation and Prospects (WESP) report estimated the growth rate of India’s gross domestic product (GDP) at 9 per cent last year and forecast it to moderate to 6.7 per cent this year and 6.1 per cent next year but still retain the highest growth rates among the large economies.
In 2020, the year Covid-19 pandemic struck the world, India’s economy had shrunk by 7.1 per cent – a negative growth rate – according to the report.
China, which came next among the large economies, was estimated to have grown by 7.8 per cent last year and forecast to grow by 5.2 per cent this year and 5.5 per cent next year.
Overall, the global economy’s growth was estimated to be 5.5 per cent last year, bouncing back from a shrinkage of 3.4 per cent in 2020.
The growth projections are 4 per cent this year and 3.5 per cent in 2023.
The report said: “India’s economic recovery is on a solid path, amid rapid vaccination progress, less stringent social restrictions and still supportive fiscal and monetary stances.”
The WESP raised India’s growth estimate for last year by 1.7 per cent and the growth projection for this year by 0.8 per cent from the expectations in its report a year ago.
It ascribed slowing down of growth from 9 per cent last year to 6.7 per cent this year to waning base effects.
While “robust export growth and public investments underpin economic activity”, the WESP warned that “high oil prices and coal shortages could put the brakes on economic activity in the near term”.
“It will remain crucial to encourage private investment to support inclusive growth beyond the recovery,” it advised.
“Inflation is expected to decelerate throughout 2022, continuing a trend observed since the second half of 2021 when relatively restrained food prices compensated for higher oil prices,” the report said while attaching a note of caution: “A sudden and renewed rise in food inflation, however, due to unpredictable weather, broader supply disruptions and higher agricultural prices, could undermine food security, reduce real incomes and increase hunger across the South Asia) region.”
The report estimated India’s consumer price inflation at 5.9 per cent last year and projected to go down to 5.6 per cent this year and 5.3 per cent next year.
The WESP said that it expected the Reserve Bank to raise interest rates throughout this year.
In its snapshot of the world economy, the report said: “The global economic recovery is facing significant headwinds amid new waves of Covid-19 infections, persistent labour market challenges, lingering supply-chain challenges and rising inflationary pressures.”
“The momentum for growth – especially in China, the United States and the European Union – slowed considerably by the end of 2021, as the effects of monetary and fiscal stimuli began to recede and major supply-chain disruptions emerged,” according to the report.
Antonio-Guterres
Assessing the scenario in the report, Secretary-General Antonio Guterres said: “In this fragile and uneven period of global recovery, the World Economic Situation and Prospects 2022 calls for better targeted and coordinated policy and financial measures at the national and international levels.”
The 46 countries classified as the least developed are estimated to grow by only 1.4 per cent this year, according to the WESP.
“The time is now to close the inequality gaps within and among countries. If we work in solidarity – as one human family – we can make 2022 a true year of recovery for people and economies alike,” Guterres said.
The WESP painted a mixed picture for South Asia.
“Amid sound macroeconomic policies, Bangladesh has navigated the Covid-19 pandemic relatively well” and its “GDP is projected to expand by 6 per cent in 2022”, the report said.
Its “economic activity rides on export growth and the rising demand for apparel, robust remittance inflows, and accommodative fiscal and monetary policies”, it added.
Pakistan’s economy after an economic expansion of 4.5 per cent in 2021, is projected to grow by 3.9 per cent in 2022 “driven by private consumption, record-high remittances and fiscal support”, according to the report.
But for Sri Lanka, the WESP projected a GDP growth of 2.6 per cent for this year and said that “its major challenges include food shortages, dwindling foreign reserves and sovereign debt risks”.
Among the developed countries, the UK was projected to be the top performer with a 4.5 per cent GDP growth this year, after a 6.2 per cent estimated growth last year.
The European Union’ growth was estimated at 4.7 per cent last year and projected to be 3.9 per cent this year.
For the United States, the report estimated the growth at 5.5 per cent last year and projected it to be 3.5 per cent this year.
While the WESP used the calendar year calculations for the report to enable comparisons between countries, it also gave this growth picture for India on a fiscal year basis – 2020-2021: -(minus)10.6 per cent; 2021-22: 8.4 per cent; 2022-223: 6.5 per cent, and 2023-24: 5.9 per cent.
The rising cases have led to various curbs instituted by state governments such as reduced capacity of markets, night and weekend curfews to check human mobility….reports Asian Lite News
Rising cases of the Omicron variant of Covid-19 and the subsequent curbs will have an adverse impact on India’s Q4FY22 GDP, said India Ratings and Research (Ind-Ra).
The rising cases have led to various curbs instituted by state governments such as reduced capacity of markets, night and weekend curfews to check human mobility. As per Ind-Ra’s estimates, GDP growth in Q4FY22 will now come in at 5.7 per cent year-on-year (YoY) which is 40 basis points lower than the agency’s earlier estimate of 6.1 per cent.
“For the entire FY22, the GDP is expected to clock a growth rate of 9.3 per cent YoY, 10 bp lower than our earlier estimate of 9.4 per cent,” the agency said.
Although Omicron cases are spreading much faster than the earlier Covid variants, indications, so far, suggest that the infections are milder and mostly not life threatening.
Resultantly, the curbs imposed by state governments will be less disruptive than Covid 1.0 and 2.0. Also, the earlier two waves have made both government and businesses more equipped to deal and be more resilient in such situations.
Consequently, Ind-Ra said: “the impact of Covid 3.0 on the economy will be lower than Covid 1.0 and 2.0. Once the Covid 3.0 subsides, the economy is expected to bounce back pretty quickly. However, this would not have been possible without the policy support.”
According to the agency, policy support – both monetary and fiscal – would be critical till the threat of pandemic continues and the economy reaches the stage of a sustained growth trajectory.
“Despite the ongoing recovery, select high frequency indicators such as ‘Index of Industrial Production’ are showing that the industrial output levels are still lower than pre-Covid-19 levels. Against this backdrop, Ind-Ra believes the Reserve Bank of India will continue to pursue its accommodative policy stance with no change in the policy rate in the foreseeable future and the union government would not be in a hurry to get back to the fiscal consolidation path. It will be a gradual process keeping the unfolding economic scenario in mind,” it said.
Economists forecast that the currencies of Indonesia, India, and the Philippines will depreciate towards 2022. ..writes Sanjeev Sharma
While “Covid shock” maintains its number one position among risk factors in leading Asian economies, in India “inflation risk” has replaced it for the first time since the March 2020 poll, according to a latest survey.
The Japan Centre for Economic Research and Nikkei conducted the 24th quarterly consensus survey on Asian economies.
In India, economists identify inflation as the greatest risk, as per the survey.
Tirthankar Patnaik, Chief Economist at National Stock Exchange of India, says that “inflationary pressures persist amid rising commodity prices and sustained supply-side bottlenecks. The emergence of the most recent variant, Omicron, is likely to further aggravate the supply-side woes with countries imposing restrictions again”.
Inflation forecasts are relatively calm in Asian economies except in India, the survey adds.
US monetary policy risks are ranked second in Malaysia and third in India. India’s CRISIL’s Dharmakirti Joshi agrees with him, saying that “faster normalization of US monetary policy than expected previously could affect global risk sentiment, causing capital outflows from emerging markets like India”.
Economists forecast that the currencies of Indonesia, India, and the Philippines will depreciate towards 2022.
Asian countries have maintained low interest rates, cutting interest rates to stimulate the economy since the Covid-19 pandemic started, but now they will seek to raise rates while watching the Fed rate hike and trends in their own currencies. Economists predict that India, Indonesia, Malaysia, and the Philippines will start raising policy interest rates in 2022.
Widespread optimism distinguishes this survey from the past seven surveys, which have been pessimistic since the onset of the pandemic in January 2021.
The growth rate of India in fiscal 2021 (2021/2022) rose to 9.5 per cent, up 0.1 points.
Economists expect GDP levels to recover to pre-pandemic levels (2019) in Indonesia, Singapore, and India in 2021, the Philippines and Malaysia in 2022, and Thailand in 2023.
The survey respondents for India included Punit Srivastava, head of research, Daiwa Capital Markets India; Dharmakirti Joshi, chief economist, CRISIL; Tirthankar Patnaik, chief economist, National Stock Exchange of India; Jyoti Vij, deputy secretary general, the Federation of Indian Chambers of Commerce and Industry (FICCI); Bidisha Ganguly, chief economist, Confederation of Indian Industry; Rahul Bajoria, director, regional economist, Barclays Bank; Aurodeep Nandi, India economist, Nomura India; Sonal Varma, chief India economist, Nomura India.
As per the survey, India is back to normal with lower momentum. Given a drastic decrease in Covid-19 cases since July, India’s GDP growth rate forecast for 2021 is revised upward 0.1 percentage point to 9.5 per cent, and GDP is expected to return to its pre-pandemic level.
In 2022, the rate is expected to be 7.5 per cent, which is a downward revision of 0.2 points, but it can be said that it remains strong.
Sonal Varma and Aurodeep Nandi, Economists of Nomura India say: “Looking ahead, the outlook is more mixed, with improving mobility, but supply-side bottlenecks are bogging down production alongside signs of weakness in demand for mass consumption goods.”
Still, they “expect continued economic normalization in the coming quarters, albeit with lower momentum”.
Dharmakirti Joshi, Chief Economist at CRISIL, gives his view: “After contracting in the first quarter of this fiscal, economic activity rebounded sharply in the second quarter as increased vaccination coverage enabled easing of pandemic-related restrictions. Even as exports and government CAPEX continue to support growth, sustaining the growth momentum depends on private consumption, where recovery remains gradual.”
Progress in vaccination, quick reduction in new cases of Covid-19, and a series of reopenings brought hope for an early recovery of the Indian economy, but some risk factors continue to cast shadows, as per the survey.
Economists have ranked inflation from supply-side bottlenecks and higher commodity prices as the top risks facing recovery. In addition, they showed renewed concerns on coronavirus and the Omicron variant, alongside weak private consumption and US monetary policy, the survey said.
Private Consumption is the main concern, the survey says and the outlook is mixed. Sonal Varma of Nomura India points out that “supply-side bottlenecks are bogging down production, alongside signs of weakness in demand for mass consumption goods”.
Dharmakirti Joshi of CRISIL says: “Even as exports and government capex continue to support growth, sustaining momentum depends on private consumption, where recovery remains gradual.”
He also sees “potential spread of Omicron variant” as a risk.
Economists are wary of creeping inflation. Tirtankar Patnaik of NSE stressed that the “ongoing energy crisis and persistent supply-side disruptions may continue to pose upside risks to core inflation”.
Bidisha Ganguly of CII cautions that “CPI is likely to firm up in early 2022 as rising input costs get passed through to consumers” with improvement of demand conditions”, according to the survey.
In good news for India going into 2022, British consultancy Cebr predicted that India looks set to overtake France next year and then the UK in 2023 to regain its place as the world’s sixth biggest economy. The world’s economic output will exceed $100 trillion for the first time next year.
Cebr said over the next 15 years, it forecasts that India will see an improvement in its ranking in the World Economic League Table, rising from 7th place in 2021 to be the world’s third largest economy in 2036.
The report said India is also looking enhance to its position globally, with the nation witnessing strong foreign domestic investment in 2020 and 2021. Such performances have boosted India’s status as an alternative investment destination, as the risk perception of the Indian capital market improves.
The infrastructure bottlenecks that exist in India mean that investment in this area has the potential to unlock significant productivity gains, the report said.
The Government has recognized this, launching initiatives to develop infrastructure via its National Infrastructure Plan and other various investment opportunities.
Acuite Ratings & Research said: “For FY22, we continue to retain our GDP growth forecast at 10.0 per cent albeit with some downside risks from new virus mutations, supply chain disruptions and the risk of volatile capital flows arising from faster policy normalisation in some of the major economies.”
Motilal Oswal Institutional Equities said in note after the RBI policy minutes that inflation projections were kept unaltered at 5.3 per cent YoY for FY22 (slightly below our expectation of 5.4 per cent YoY), as was the growth forecast of 9.5 per cent for the year (higher than our forecast of 9.1 per cent YoY).
“There were no major surprises in the policy statement. We believe inflation to come in higher and real GDP lower than expected by the RBI. This, along with the possible threat from the Omicron variant, could postpone a hike in the reverse repo rate to April 22. On the contrary, if real GDP growth and inflation do come in line with the RBI’s expectations and the fear related to Omicron does not materialize, a 15bps reverse repo rate hike could happen in Feb 22. We also believe that the Union Budget 2022�23 would influence the MPC’s decision of February 22,” it added.
A recent CEOs Poll conducted among members of CII National Council, indicates that Indian economy is set for a strong rebound in 2021-22. This was revealed by 56 per cent of the CEOs polled, who indicated that the economy would grow in the range of 9 to 10 per cent during 2021-22, while another 10 per cent of the CEOs polled expect the economy may grow at a faster pace of more than 10 per cent this fiscal year.
The respondents were also upbeat on sentiments regarding their business, with 35 per cent of the CEOs indicating that the increase in revenue this year may be in the range of 10 to 20 per cent when compared to pre Covid year (2019-20), while another 33 per cent of the CEOs indicated expectations of a bigger jump in revenues (more than 20 per cent increase when compared to the pre Covid year).
On the gross profits front as well, 35 per cent of the CEOs polled indicated more than 20 per cent increase in gross profits when compared to the pre Covid year, while another 17 per cent indicated an increase in growth of profits by 10 to 20 per cent. This optimism among the CEOs is despite more than third of them (70 per cent) observing that supply chain bottlenecks were causing problems in the movement of goods in their industry sector.
Union Home Minister Amit Shah said at a recent FICCI event that India has come out of the pandemic with minimum loss as compared to other countries.
“We are reaching the pre-Covid levels. July to September GDP number has been at 8.4 percent and I think in the year 2021-22, India is likely to become the fastest growing economies in the world. I will not be surprised if we touch double digit growth,” he added.
Shah had said that out of the 22 parameters of the economy, India has exceeded in 19 parameters, and this shows that we have come out strong. Both manufacturing and service sector index have reached the pre-Covid levels. “With the announcements of various packages and relief, our inflation is in the range of 4-6 percent as set by the government.”
Foreign brokerage firm Morgan Stanley said in a note that the RBI retained its growth projection at 9.5 per cent for F2022 on the back of strengthening growth momentum as it gradually broadens to all sectors of the economy led by rapidly increasing vaccination coverage and improving business and consumer sentiment and thus demand.
On the inflation front, the MPC held to its headline CPI estimate of 5.3 per cent for F2022, with risks broadly balanced, as the government’s supply-side interventions, easing global commodity prices and robust sowing activity are likely to keep the inflation print range-bound. Core inflation, however, is likely to remain sticky due to existing supply-side and cost-push factors with higher risks of pass through to output prices as demand conditions normalise further.
“In our view, the February policy will likely mark the start of policy normalization with a reverse repo rate hike to normalise the policy rate corridor. However, we anticipate the lift-off and its quantum to be contingent on the impact of Omicron on economic activity. If the growth momentum remains durable, we would then expect that the RBI could choose to hike the reverse repo rate 40bp to adjust the policy rate corridor in one shot.
“Next, we expect this to be followed by a hike in the repo rate in the April, with a cumulative rise of 150bps in F2023. The policy rate path is driven by a robust recovery in growth. We see India’s GDP growth gaining strength with all drivers of growth contributing. We expect the GDP growth path to be higher than the pre-pandemic growth path by 2HF23,” Morgan Stanley said.
HSBC in a report on Indian equities said macro recovery has been ahead of expectations, and the short run growth outlook appears attractive, supported by a strong pent-up goods demand, higher governmental capex and better-than-expected tax collections.
However, private consumption remains weak, which reflects the disruption faced by informal sectors, according to HSBC’s India economics team. This is linked to the rise in inequality post pandemic. Eighty percent of India’s labour force is informal. About half of them, i.e. the non-agricultural informal labourers, have faced the brunt of the pandemic. The loss in their incomes could hurt future demand and thereby the growth prospects of the formal sector.
Nevertheless, new drivers of the economy have emerged, which could offset the potential demand slowdown, which include: i) high skill exports; ii) new age tech ecosystem; and iii) governmental reforms such as the asset monetization programme, the creation of a bad bank, and expansion of the Production Linked Incentive scheme, HSBC said.
“Our in-house view is that India’s GDP will grow at 8.4 per cent in FY22 and slightly moderate to 6.4 per cent in FY23. HSBC’s FX team expects the USD-INR exchange rate to remain largely stable and thinks it is likely to retrace towards the 73 level by end 2022,” the report said.
HSBC said 2022 as a year of contrasting narratives and volatilities: One narrative is of caution: 1) one of the larger concerns is relative rotation of flows to other markets in Asia, given their underperformance last year; 2) valuation is perceived to be expensive across many sectors; 3) growth concerns and margin headwinds in the near term tend also to trigger near-term caution; 4) while crude has corrected from its peak, prices are expected to stay elevated and this remains a key factor influencing volatility in India’s market; 5) potential size of US tapering is another factor which increases uncertainty around flows to the India market; 6) uncertainty around the spread of the new Covid-19 variant.
But the other narrative is of continued potential momentum, it added.
The output of the service sector grew by 1.6 per cent in the third quarter when compared with the previous quarter…reports Asian Lite News
The UK’s gross domestic product (GDP) has recorded a 1.3 per cent quarterly rise in the third quarter as Covid-19 restrictions were further eased, the Office for National Statistics (ONS) said in its latest update.
The third quarter GDP was still 2.1 per cent below where it was before the pandemic in the fourth quarter in 2019, Xinhua news agency quoted the ONS as saying.
The output of the service sector grew by 1.6 per cent in the third quarter when compared with the previous quarter, with 0.7 per cent below fourth quarter 2019 levels, figures showed.
Meanwhile, production output increased by 0.8 per cent in the third quarter, 2.1 per cent below its pre-Covid levels.
Construction output fell by 1.5 per cent quarter-on-quarter.
Earlier this month, the Bank of England announced that it will keep interest rates unchanged at 0.1 per cent despite widespread speculation that it will raise rates to contain rising inflation.
Annual inflation stood at 3.1 per cent in September, and is expected to peak at around 5 per cent in April 2022, the bank predicted, adding that the upward pressure on the consumer price index, a main gauge of inflation, is expected to dissipate over time.
The bank made two emergency base rate cuts from 0.75 per cent to 0.1 per cent to support businesses and households since the Covid-19 pandemic began.
Puri was addressing the inaugural session of an event, ‘Connect Karo 2021 – Towards Equitable, Sustainable Indian Cities’…reports Asian Lite News
As rapid urbanisation facilitates efficiencies of agglomerations, almost 70% of India’s GDP will come from the cities by 2030, Union Housing and Urban Affairs Minister Hardeep Singh Puri said on Monday.
India’s cities — enabled by citizen-centric infrastructure and transformational technology — will be the key to achieving the nation’s development objectives, he said.
Puri was addressing the inaugural session of an event, ‘Connect Karo 2021 – Towards Equitable, Sustainable Indian Cities’.
He pointed out that the best-performing cities globally contribute five times more to national GDP than comparable Indian cities.
“We need to generate a similar density of economic activity from our cities to answer the calls of our honourable Prime Minister in becoming a five-trillion-dollar economy,” he said.
According to Puri, even as cities become the engines of our country’s economy, it is equally important to address the infrastructure deficits that will arise from rapid urbanisation and complex migrant flows.
By 2030, the urban population in India will almost double to 630 million.
“If we are to facilitate this level of growth, we will need to upgrade our urban infrastructure considerably and horrific impact of COVID-19 on our cities has made this even more significant,” he said.
He also highlighted the adverse impact of growth of urbanization, saying that realising the potential of the cities was not just an economic imperative; it was also an environmental reality.
“Our cities will be the battlegrounds for the fight against climate change,” he noted.
Referring to the recent IPCC report, he said cities were the major contributors as well as the worst-affected from climate change. This had led to the Indian Government successfully executing the most comprehensive and planned urbanisation programme anywhere in the world.
In this context, Puri mentioned the eight-fold increase the total expenditure on urban development.
The figure over the past six years (2015-2021), was about Rs 11.83 lakh crore, against the Rs. 1.57 lakh crores from 2004 to 2014, he said.
The minister informed that Government will be launching the Jal Jeevan Mission (Urban), with an outlay of Rs. 2.8 lakh crore to ensure universal water supply in all 4,378 urban local bodies in India and enable liquid waste management in 500 cities under the AMRUT scheme.
He added that the Government would also be launching the Swachh Bharat Mission 2.0.
With an outlay of Rs. 1.41 lakh crores, it would focus on sludge management, waste water treatment, source segregation of garbage, and reduction in single-use plastics and control of air pollution by waste management in construction and demolition, and bio-remediation dump sites. (India News Network)
Pandemic-triggered national lockdown during Q1FY21 had a massive impact on the economy, which suffered a GDP contraction of 24.4 per cent, reports Asian Lite News
The Covid-induced volatility heavily dented India’s economy in the last fiscal as its growth rate plunged (-) 7.3 per cent in FY 2020-21.
Though not comparable, the GDP had grown by 4 per cent in 2019-20.
Accordingly, the pandemic-triggered national lockdown (from late March 2020) during Q1FY21 had a massive impact on the economy, which suffered a GDP contraction of 24.4 per cent. It was only on June 1, 2020 that the partial unlock measures were implemented.
However, pent-up demand and gradual opening up of economic activities arrested any other economic pitfall.
Nonetheless, the devastating impact on consumer services, urban demand and rising commodity prices had more or less painted a grim economic picture for FY21.
The data furnished by the National Statistical Office (NSO) showed that real GDP or Gross Domestic Product at constant (2011-12) prices in 2020-21 attained a level of Rs 135.13 lakh crore, as against the ‘first revised estimate’ of GDP for the year 2019-20 of Rs 145.69 lakh crore.
On the other hand, on sequential basis, India’s economy grew during the fourth quarter, which ended on March 31, 2021, by 1.6 per cent.
“GDP at Constant (2011-12) Prices in Q4′ of 2020-21 is estimated at Rs 38.96 lakh crore, as against Rs 38.33 lakh crore in Q4 of 2019-20, showing a growth of 1.6 per cent,” according to the GDP estimates released by the Central Statistics Office (CSO).
Besides, the CSO said: “There was a sharp spike from Rs 2.27 lakh crore in BE 2020-21 to Rs 5.95 lakh crore in the revised Estimates for the major subsidies (especially food subsidies) of Centre, presented in Budget 2021-22, in RE 2020-21.”
“Revised provision of subsidies of Centre has been considered after adjusting for arrears of previous years and repayment or prepayment of loans, as per information received from Ministry of Finance,” it said.
In terms of quarterly Gross Value Added (GVA), the NSO data showed a year-on-year rise of 3.7 per cent from 1 per cent in Q3FY21. The GVA includes taxes, but excludes subsidies.
On a sequential basis, Q4 GVA for 2020-21 from the agriculture, forestry and fishing sectors grew 3.1 per cent, against 4.5 per cent in the preceding quarter of 2020-21.
The GVA from the manufacturing sector grew 6.9 per cent, as compared to a growth of 1.7 per cent in Q3FY21.
Furthermore, mining and quarrying contracted (-)5.7 per cent from (-)4.4 per cent in Q3FY21, while construction activity plunged by 14.5 per cent from 6.5 per cent.
The GVA growth rate of ‘electricity, gas, water supply & other utility services’, ‘trade, hotels, transport, communication and services related to broadcasting’ and ‘public administration, defence and other services’ also increased during this period.
Another key growth gauge — Gross Fixed Capital Formation — which underscores the overall acquisition of produced assets in the economy, is estimated to have declined to 10.8 per cent in FY21 at constant (2011-2012) prices.
On yearly basis, the only component that showed growth in FY21 is the government’s final consumption expenditure which grew at 2.9 per cent.
The other major components, namely private final consumption expenditure (PFCE), contracted by 9.1 per cent in FY21.
“Benefitting from the broad-based surge in volumes, India’s economic growth improved in Q4 FY2021, although the impact of the low base related to the onset of the nationwide lockdown can’t be written off,” said Aditi Nayar, Chief Economist, ICRA.
“Nevertheless, as expected, the Indian economy firmly averted the double dip contraction that had been insinuated by the previously released advance estimates for FY2021,” Nayar said.
According to Sunil Kumar Sinha, Principal Economist, India Ratings & Research: “On the supply side, agriculture, as expected, grew at a robust 3.6 per cent in 4QFY21 and 3.6 per cent in FY21. However, the more heartening numbers came from the industrial sector which though contracted by 7 per cent in FY21, its various segments, except mining, witnessed accelerated growth momentum in 4QFY21.
“We must not, however, overlook the fact that a large part of the turnaround witnessed in 3QFY22 and 4QFY22 will get a push back in 1QFY22 due to the second wave of Covid, but the YoY numbers may still look good due to extremely low base of 1QFY21.”
Suman Chowdhury, Chief Analytical Officer, Acuite Ratings & Research: “As expected, agriculture has recorded a healthy GVA growth of 3.6 per cent in FY21 with all the other industrial and service sectors witnessing significant contraction under the severe impact of Covid.
“Contact intensive activities such as trade, hotels and transports have recorded a deep contraction of 18.2 per cent given the disruptions and the demand disruption created by the pandemic.”
