The Centre is expected to lower the growth forecast in the gross domestic product (GDP) for the current fiscal when the NSO releases the second advance estimate for 2021-22 on Monday.
In its first advance estimate released on January 7, the National Statistical Office has forecast a GDP growth of 9.2 per cent for the fiscal. But India Ratings has now forecast an 8.6 per cent growth for the current fiscal, while Icra has projected an 8.9 per cent growth.
The economists at India Ratings and Icra attributed the lower projection to the upward revision of GDP to Rs 135.6 lakh crore — the first revised estimate for 2020-21 — announced with Economic Survey on January 31.
Sunil Kumar Sinha, principal economist, India Ratings, said the NSO was likely to put FY22 real gross domestic product at Rs 147.2 lakh crore. This translates into a GDP growth rate of 8.6 per cent.
The higher first advance estimate for 2020-21 lowered the contraction of GDP for the year to 6.6 per cent from the provisional estimate of 7.3 per cent released on May 31, 2021.
Besides this, the second revised estimate of national income for FY20 stood at 3.7 per cent compared with 4 per cent projected earlier, while the third estimate retained FY19 growth at 6.5 per cent.
Aditi Nayar, chief economist at Icra, said: “With minor disruption caused by the third wave, we believe that the second advance estimates could peg GDP growth in FY22 at 8.9 per cent with a modest downside on account of the upward revision in the GDP for FY21.”
Icra has also lowered the quarterly growth projections for the last fiscal. Growth in the first two quarters may decline 90-110 basis points than previous estimates. Third quarter growth is projected to be lower at 5.6 per cent from 6 per cent and fourth quarter to 5.1 per cent from 5.7 per cent.
RBI view
GDP will be just 1 per cent above the pre-pandemic level in this fiscal and this factor, coupled with comfort on inflation, make the RBI continue with the accommodative monetary policy, RBI deputy governor M.D. Patra said.
