NSO reports economy inching back to normalcy with GDP growing 9.2% in fy22

As per the Advance Estimate released by National Statistical Office (NSO), India’s nominal GDP may expand to Rs 232.1 trillion in FY22, from Rs 203.5 trillion in FY20.

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NSO reports economy inching back to normalcy with GDP growing 9.2% in fy22

After recovering from a contractionary year, the economic growth of India for FY21-22 is estimated to be at 9.2%, with a possible low impact of the Covid third wave on the economy.  This figure is supported by the uptick in the farm, mining, and manufacturing sector outputs. As a result of the second wave and a nationwide lockdown, GDP had contracted to 7.3% in the previous fiscal year.

As per the Advance Estimate released by National Statistical Office (NSO), India’s nominal GDP may expand to Rs 232.1 trillion in FY22, from Rs 203.5 trillion in FY20. Inching gradually back to the pre-pandemic GDP for the second quarter of the financial year grew by 8.4% from a year ago, one of the fastest rates among major economies, according to the data released by the government.

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“Real GDP or GDP at Constant Prices (2011-12) in the year 2021-22 is estimated at ₹147.54 lakh crore, as against the Provisional Estimate of GDP for the year 2020-21 of ₹135.13 lakh crore, released on 31st May 2021. The growth in real GDP during 2021-22 is estimated at 9.2 percent as compared to the contraction of 7.3 percent in 2020-21,” the Ministry of Statistics & Programme Implementation said in a statement.

The growth rate seems to be a tad bit lower than what RBI had projected earlier. Reserve Bank of India (RBI) has projected a GDP growth rate of 9.5% for the current financial year with inflation seen at 5.3%. The World Bank and Moody’s have projected the Indian economy to grow at 8.3 percent and 9.3 percent, respectively.

While key sectors are expected to see double-digit growth, private spending or consumption demand is likely to see a modest recovery.

“Consumption is seriously down. Income has shifted from high consumption category people to high saver category people. Then what you get is lower consumption even with relatively high-income growth. The savings rate has gone up. Investment data is reasonably good, that’s a good sign. Change in stocks, which reflects inventories held by producers, is high. It’s part of production but not getting sold. Valuables are also huge, seems to suggest people are buying jewelry, artwork, a sign of inequality and change in income distribution,” former Chief Statistician of India Pronab Sen said.

The NSO estimates significant growth in ‘mining and quarrying (14.3%), and ‘trade, hotels, transport, communication and services related to broadcasting’ (11.9%). The agriculture sector is seen growing at 3.9 percent in FY22 as against 3.6 percent growth in the previous year. Electricity generation is estimated to grow 8.5 percent as against 1.9 percent last year.

While the real GDP growth rate is estimated to be 9.2 percent, the GDP in nominal terms, which factors in inflation, is estimated at 17.6 percent for 2021-22 as against a contraction of 3 percent in 2020-21. This reflects high prices, with inflation estimated to be 8.4 percent for the full year (inflation = nominal GDP – real GDP).

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NSO reports economy inching back to normalcy with GDP growing 9.2% in fy22
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As per the Advance Estimate released by National Statistical Office (NSO), India’s nominal GDP may expand to Rs 232.1 trillion in FY22, from Rs 203.5 trillion in FY20.
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THE POLICY TIMES
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