India's economy grows 8.7 pc in 2021-22 as against 6.6 pc contraction in previous fiscal

Tribune News Service

Sandeep Dikshit

Tribune News Service

New Delhi, May 31

India’s gross domestic product (GDP) during the 2021-22 fiscal is estimated at 8.7 per cent as compared to a contraction of 6.6 per cent in 2020-21.

GDP grew 4.1 per cent as against 2.1 per cent year-on-year in the fourth quarter of 2021-22, according to the official data released on Tuesday

Though these figures are much lower than the Reserve Bank of India’s (RBI) projections, Chief Economic Adviser Anantha Nageshwaran said the actual figures were much better than what many in the private sector had anticipated due to the Omicron wave in January thanks to a very robust performance in exports.

“We will of course be affected by what is happening in the rest of the world,” he said while attributing two per cent of the inflation due to higher prices of imported commodities such as oil which is pushing at $ 120 per barrel.

Stagflationary risks for India are quite low compared to the rest of the world. There is considerable momentum in economic activity as witnessed by GST numbers in April, he added.

Looking ahead, the CEA said in the current fiscal, agriculture production in the ongoing rabi season will be 1.2 per cent higher. Coupled with the projections of a normal monsoon, there will be fairly brisk growth in rural income which in turn will trigger higher rural demand. With the PMI of manufacturing and services ruling above 50 levels, which marks the neutral level, Nageshwaran said this means that both are in “expansion territory”.

Besides, the combined Index of Eight Core Industries stood at 143.2 in April 2022, which is an increase of 8.4 per cent (provisional) as compared to the index of April 2021.

The production of coal, electricity, refinery products, fertilisers, cement, and natural gas industries increased in April 2022 over the corresponding period of last year.

The CEA defended the Government’s attempts to control inflation by pointing out that India is not an isolated case. In fact, he said the inflation level in India is somewhat better than is the case with many developed and developing countries.

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