New Delhi: The Indian economy is expected to grow at 9.1% in the financial year 2021-22 (FY22), as mentioned in the latest Economic Outlook Survey by industry body FICCI on Thursday. The Gross Domestic Product (GDP) projection shows a slight improvement from the growth forecast of 9% recorded in its previous survey in July.
“The economic recovery, after the second wave of the COVID-19 pandemic, is taking hold and this is reflected in the data coming in on various high frequency indicators. The upcoming festive season should support this momentum,” Federation of Indian Chambers of Commerce and Industry said.
However, it added a note of caution to Diwali celebrations and urged them to bring “some sense of complacency with respect to the Covid situation” as a “potential surge in people’s movement could again lead to a rise in new coronavirus cases.” “
According to the FICCI survey, the average growth rate for agriculture and allied activities for FY12 has been kept at 3.2%. The Chamber said the industry and services sectors are projected to grow at 12.9% and 8.6%, respectively, during the year.
The survey was conducted in September and received responses from economists from industry, banking and financial services sectors.
When asked about the upcoming monetary policy review of the Reserve Bank of India (RBI), most economists said that the central bank will maintain status quo on the repo rate and continue with a lenient stance. He largely felt that the RBI may indicate a change of stance from accommodative to neutral in the February 2022 policy meeting and an increase in the repo rate in the next financial year.
The current repo rate – the rate at which RBI lends money to commercial banks – is 4%.
“The GDP data for the second quarter and the upcoming festive season should give a clear idea of where we are headed on the recovery path and how the demand situation is progressing. Apart from this, we will also get more clarity on the status and outlook of COVID. The third wave after the festive season. Till then, the central bank may continue to resort to soft liquidity withdrawal policies,”
India’s economy grew at 20.1% in the first quarter (Q1) ended June 30 (FY22), as against a contraction of 24.4% in Q1 FY21. And, the second quarter (Q2 FY22) GDP data is expected to be released on 30 November.
The survey’s average forecast for the CPI-based (retail) inflation rate was 5.6% for 2021-22.