India's GDP may grow 9.2% in FY22: First advance estimates

The Indian economy is estimated to grow at 9.2 per cent in 2021-22, as against a contraction of 7.3 per cent in the previous fiscal, mainly due to improvement in the performance of agriculture and manufacturing sectors, the National Statistical Office (NSO) said on Friday.

Releasing the first advance estimates of National Income for 2021-22, the NSO stated, "The growth in real GDP during 2021-22 is estimated at 9.2 per cent as compared to the contraction of 7.3 per cent in 2020-21."

"Real GDP or GDP at Constant Prices (2011-12) in the year 2021-22 is estimated at Rs 147.54 trillion, as against the Provisional Estimate of GDP for the year 2020-21 of Rs 135.13 trillion, released on 31st May, 2021. Real GVA at Basic Prices is estimated at Rs 135.22 trillion in 2021-22, as against Rs 124.53 trillion in 2020-21, showing a growth of 8.6 per cent," it added.

Advance estimates are released to provide the numbers to the finance ministry to work on the Budget for the next financial year.

The Budget takes the nominal GDP announced by NSO and then assumes a growth rate for FY23 and then derives the fiscal deficit as a percentage of the nominal GDP; taxes are also worked out on the basis of nominal GDP growth.

Advance estimates have accurately projected the real GDP growth rate in three of the past 13 years — 2012-13, 2015-16 and 2016-17. The growth rate was actually higher than the Advance Estimate for 2009-10, while in 2017-18, the second Advance Estimate was accurate, but the first one was not.

The Omicron variant spread will impact the January-March quarter GDP by 0.40 per cent and shave off 0.10 per cent from the FY22 growth, as many states resort to restrictions to limit infections, a domestic rating agency said on Thursday. Curbs in various forms such as reducing the capacity of market/market complexes and night/weekend curfews to check human mobility/contact have already started in several states, which are impacting economic activities, India Ratings and Research said in a note.