India’s GDP is projected to grow at 10.5pc in FY2021-2022 announced Reserve Bank of India (RBI) on Friday citing positive growth impetus and the launch of the vaccination program to reign the pandemic. RBI has projected real GDP growth at 26.2pc to 8.3pc in H1 and 6pc in Q3 recovering against a low-base in FY2020-2021.
RBI Governor Shaktikanta Das said that 2021 is setting the stage for a new economic era in the course of our history, in his statement after the monetary policy review meeting. He further expressed that India has moved beyond pend-up demand and it will only pick up from here. Growth outlook has improved significantly and the inflation has returned to tolerable levels, he added.
With signs of economic recovery strengthening in India, consumer confidence is improving, and business expectations of manufacturing, services and infrastructure is upbeat. The flow of financial resources to businesses has been improving. Energy demand indicates a broader normalisation of activity post December as fears of a second wave fades, while sales of residential units have improved in major metropolitan centres, and manufacturing, services and composite PMI are expanding. Further, the ongoing vaccination drive is expected to revive restoration of contact intensive sectors, stated Governor.
The central bank has kept the repo rate (key interest rate) unchanged at a 19-year low of 4pc, while the reverse repo is at 3.35pc. RBI lowers inflation estimate for Q4 to 5.2pc and expect it at around 5pc in H1.
Earlier, government’s Economic Survey had predicted a V-shaped recovery with 11pc growth in FY2022 while the IMF predicted India to grow at 11.5pc.