Economy Set To Grow At More Than 9% In Current Fiscal: Finance Ministry Report

High frequency indicators show that India's economy is well on its way to growing at above 9 per cent as projected in the advanced estimates for the current fiscal. This has been indicated by the finance ministry's monthly economic review, which was released on Wednesday.

The review for the month of January 2022 has further noted that the impact of the third wave of Coronavirus pandemic on economic activities has weakened, compared to the previous two waves, and this is likely to help economic indices grow positively.

“India is experiencing the subsiding of the third wave induced by Omicron variant of COVID-19. Although quickest of the three waves to reach the peak, it has been the least fatal thankfully,” the review said.

Global inflation and energy prices are likely to be influential in determining India's rate of inflation, it said.

With the monetary policy committee (MPC) of the Reserve Bank of India having retained forecast for the current fiscal at 5.3 per cent, the inflation for the current year is set to close within its tolerance band of 4±2 per cent.

The finance ministry in its review further stated that the International Monetary Fund (IMF) in its January 2022 update has lowered its global growth estimate for 2022. Yet India is the only large and major country listed by the IMF whose growth projection has been revised upwards in 2022.

The budget for 2022-23, the review said, “has strengthened the direction set for India's economy by the previous year's budget. The capex budget, higher by 35.4 per cent over current year's budget estimates and rising to 4.1 per cent of GDP after inclusion of grants-in-aid to states for capital works, will power the seven engines of Gatishakti to reduce the infrastructure gap and facilitate private investment in the country.”

Rising consumption levels consequent to employment generation by government's capex will also induce private investment, it further observed.