India’s growth rate slipped to a four-quarter low of 4.1% in the January-March period as a resilient post-pandemic rebound was disrupted by the Russia-Ukraine war that inflated prices of oil and other key commodities, and impeded the global supply chains.
As Yet, in 2021-22, the country re-captured the fastest-growing major economy tag from China after a five year gap, by reporting a gross domestic product (GDP) growth of 8.7% in real terms, according to the data released by National Statistics Office (NSO) on Tuesday. Earlier, The NSO had predicted the 2021-22 GDP growth at 8.8%. The economy had shrunk 6.6% in 2020-21.
The GDP in 2021-22 came in at 1.5% bigger than in 2019-20, the year immediately before the pandemic, as few sectors other than “trade hotels and transport” sagged behind. The economic recovery was helped by a growing pick-up in the long-elusive investment demand, a fleeting consumption session and an excitement of the manufacturing and construction sectors to be back on foot.
However,close recession in the U.S. and Europe, high inflation and the start of rate hike cycle by the Reserve Bank of India (RBI) to calm in prices could aggravate the economy’s growth suffering. Analysts anticipate the GDP growth in 2022-23 to be crucially lower than the RBI’s prediction of 7.2%, leave alone the IMF’s estimate of 8.2%.
Among individual sectors in the output side, “Financial, Real estate and Professional services” with a growth of 4.2% in 2021-22, was clearly weak. “Agricultural, Forestry and Allied services” somewhat held up by its standards with a 3% GVA growth in 2021-22, compared with 3.3% in 2020-21. Manufacturing and Construction sectors reported GVAs of 9.9% (on a very weak base of 8.6%) and 11.5% (-7.3%), respectively.
