India's GDP at 8.7% In 2021-22

India's GDP at 8.7% In 2021-22

WHAT HAS HAPPENED?

The Indian economy has grown by 8.7 percent

in the 2021-22 fiscal year against a 6.6% contraction in the previous fiscal. The FY22 gross value added (GVA) has come in

at 8.1%

The fiscal deficit for the 2021-22 financial year is 6.7 percent of the GDP, less than the Finance Ministry's revised Budget estimate projection of 6.9 percent. The revenue gap for FY22 was recorded at Rs 10.33 lakh crore, close to the Ministry's Budget estimate of Rs10.89 lakh crore.

CONCLUSION

Asia’s third largest economy had just begun recovering from the pandemic-induced slump when a surge in Omicron cases in January

brought back some of the virus-related restrictions. The war in Ukraine, in February, further added to its woes, pushing up commodity prices and squeezing supplies further. In the March quarter, the agriculture sector grew 4.1%, while the manufacturing segment contracted 0.2%.

High inflation is dampening consumer sentiments and growth prospects.

In April Consumer price inflation has hit a eight-year high of 7.8% and is seen averaging 6.52% this fiscal, up from 6% projected in an earlier survey. The RBI is expected to raise repo rate by another 50 basis points to 4.9% by June. Analysts said the outlook remains clouded for future growth with geopolitical uncertainties and soaring crude oil prices.