The key question is how much of the latest growth record represents recovery from the 2020-2021 downturn, and what is the sustainable growth rate now, asks T N Ninan.
India's economic growth had slumped to decade low of 5 per cent in 2012-13.
With all-round upturn in economic cycle except in agriculture, Economic think tank NCAER has forecast India's GDP growth rate at 6.5 to 6.7 per cent for this fiscal.
Growth in India is expected to slow to 6.3 per cent in FY 2023/24 (April-March), a 0.3 percentage point downward revision from January, the World Bank said Tuesday but noted there is an unexpected resilience in private consumption and investment and robust growth in the services. The World Bank made these points in its latest edition of Global Economic Prospects according to which global growth is projected to decelerate from 3.1 per cent in 2022 to 2.1 per cent in 2023. In Emerging Markets and Developing Economies (EMDEs) other than China, growth is set to slow to 2.9 per cent this year from 4.1 per cent last year. These forecasts reflect broad-based downgrades.
A Reserve Bank-authorised survey on Monday lowered the country's economic growth rate projection to 5.7 per cent for the current fiscal, down from 6 per cent estimated earlier.
The Reserve Bank on Thursday said that the overall stance of its monetary policy for this fiscal would continue to accord a high-priority to price and financial markets stability and well-anchored inflation expectations.
Apart from supply chain disruptions, Moody's also expects consumption and investment to be affected and prices of oil and other commodities to remain around current lows until the end of June.
Agriculture and allied activities are likely to grow at 5.4 per cent in 2010-11, compared to just 0.4 per cent in 2009-10, according to Advance Estimates released by the Central Statistical Organisation on Monday.
Forecasting 7.2 per cent GDP growth for the current fiscal, industry chamber CII on Tuesday stressed on sustainable development for alleviating poverty and employment generation in the country.
The National Council of Applied Economic Research (NCAER) on Thursday lowered the GDP projection for the current fiscal to 4.7-4.9 per cent due to exchange rate depreciation.
Reserve Bank Governor Sanjay Malhotra on Friday said the key policy rates will remain at low levels for a long period and may go down even further.
The BJP still does not have a majority in Upper House of Parliament, the Rajya Sabha, and this will pose hurdles to the party's legislative reform agenda
Ratings agency Crisil on Monday cut its FY14 growth forecast for India to six per cent from the earlier 6.4 per cent citing a variety of reasons, including the high lending rates, weaker pick-up in consumption and issues around mining and project clearances.
Growth projections for 2013-14 has been arrived at by taking into account present internal and external factors.
American brokerage firm Morgan Stanley on Thursday sharply cut its India FY23 real GDP growth estimate to 7.9 per cent, mainly due to the impact of the Russia-Ukraine conflict on oil prices. Analysts at the brokerage also raised their inflation forecast to 6 per cent - the upper end of the tolerance band for the RBI - and flagged stagflation risks because of the ongoing events. "We believe that the ongoing geopolitical tensions exacerbate external risks and impart a stagflationary impulse to the economy," they said. It can be noted that stagflation involves a stagnancy in output or growth, coupled with high inflation.
The Centre for Monitoring Indian Economy has revised its GDP growth forecast for the current fiscal to 6.7 per cent from 6.2 per cent announced last month.
In its macroeconomic review report, the RBI has cut FY13 GDP growth forecast to 5.7% vs 6.5%.
Morgan Stanley on Monday raised India's growth forecast for the current financial year to 5.4 per cent from 5.1 per cent projected earlier citing better than expected GDP growth in the September quarter and stabilisation in non-agriculture growth indicators.
The Economic Survey 2022-23 (FY23), to be presented a day before Union Budget 2023-24 (FY24), is likely to project India's real gross domestic product (GDP) growth between 6 per cent and 7 per cent for FY24, Business Standard has learnt. The broader theme of the Survey could be on how India has dealt with two years of a global pandemic and the ongoing geopolitical disturbance, the strengths and weaknesses that emerged, and what lessons may be learnt. The much-awaited Survey will be the first one by Chief Economic Advisor V Anantha Nageswaran and his team in the finance ministry's economic division.
This is lower than the country's growth rate of 6.7 per cent for the financial year 2008-09.
The July-September quarter GDP numbers are due on November 30.
Morgan Stanley says, India will clock 7.9 per cent GDP growth in current fiscal.
During the six-month period (April-September 2019), the Indian economy grew 4.8 per cent as against 7.5 per cent in the same period a year ago.
Even if there is an early agreement on a cessation of hostilities in West Asia, the price shock will not go away easily, points out A K Bhattacharya.
India's economic growth has slowed to a three-year low of 5.3 per cent in the April-June quarter of the current fiscal.
Stating that the economic costs of shutdown of the global economy are accumulating rapidly, Moody's projected that all G-20 advanced economies would contract by 5.8 per cent in 2020.
'The West Asia or the Gulf crisis has shown that what we develop as national infrastructure when things are not as bad as they could be, we forget to plan for adversities.'
The Indian economy is reviving, helped by positive policy actions.
S&P Global Ratings on Tuesday kept India's economic growth forecast in the fiscal year to March 2022 unchanged at 9.5 per cent but raised its predictions for the subsequent year on broadening out of the recovery. The Indian economy had shrunk by 7.3 per cent in 2020-21 fiscal (April 2020 to March 2021) as pandemic induced restrictions battered business activity. The gradual lifting of the restrictions has helped the economy to rebound from pandemic lows.
Sitharaman's Budget missed deficit target for the third year in a row, pushing shortfall to 3.8 per cent of GDP in the current fiscal as compared to 3.3 per cent previously planned.
The Asian Development Bank (ADB) on Wednesday slashed India's GDP growth forecast for FY23 to 7 per cent from the earlier estimate of 7.2 per cent mainly on account of higher inflation and a tight monetary policy. India's economy grew 13.5 per cent year-on-year in the first quarter of 2022-23, reflecting strong growth in services, ADB said in its second supplement to Asian Development Outlook Report 2022 (ADO 2022). "However, GDP growth is revised down from ADO 2022's forecasts to 7 per cent for FY2022 (ending March 2023) and 7.2 per cent for FY2023 (ending March 2024) as price pressures are expected to adversely impact domestic consumption, and sluggish global demand and elevated oil prices will likely be a drag on net exports," ADB said.
The finance ministry on Thursday said the economy was poised to grow by 7 per cent this fiscal despite the delay in monsoon, but admitted that high global oil prices were a matter of concern.
After a contraction in the current financial year, India's economy is forecast to bounce back with a sharp growth rate of 9.5 per cent next year provided it avoids further deterioration in financial sector health, Fitch Ratings said on Wednesday. The coronavirus pandemic will lead to shrinking of the already slowing economy in 2020-21 that started in April. Fitch Ratings forecast a 5 per cent contraction in the GDP in the ongoing financial year.
RBI Governor Shaktikanta Das said that early containment of the pandemic could impart an "upside" to the economic growth outlook.
'At the first sign of real trouble, that money will move. There will be a run.'
Rating firm Crisil revised downwards its GDP growth forecast to 5.5 per cent this fiscal from its earlier estimate of 6 per cent, citing reduced likelihood of monetary easing going forward due to falling rupee.
SBI Research has projected the Indian economy to grow at 7.5 per cent in 2022-23, an upward revision of 20 basis points from its earlier estimate. As per official data, the economy grew by 8.7 per cent in FY22, net adding Rs 11.8 lakh crore in the year to Rs 147 lakh crore, the report said, adding this was however only 1.5 per cent higher than the pre-pandemic year of FY20. "Given the high inflation and the subsequent upcoming rate hikes, we believe that real GDP will incrementally increase by Rs 11.1 lakh crore in FY23. "This still translates into a real GDP growth of 7.5 per cent for FY23, up by 20 basis points over our previous forecast," SBI chief economist Soumyakanti Ghosh said in a note on Thursday.
"The Monetary Policy Committee recognises that there is monetary policy space for future action. However, given the evolving growth-inflation dynamics, the MPC felt it appropriate to take a pause at this juncture," the RBI said in its fifth bi-monthly monetary policy for this fiscal.
S&P Global Ratings on Monday retained its forecast of 9 per cent contraction in the Indian economy for the current fiscal, saying even though there are now upside risks to growth but it will wait for more signs that COVID infections have stabilised or fallen. S&P, in its report on Asia Pacific, projected the Indian economy to grow at 10 per cent in the next fiscal.
Describing the current level of inflation as "unacceptable", Chief Economic Adviser in the Finance Ministry Kaushik Basu on Thursday indicated the government will revise downward the growth forecast for 2011-12.
