New Delhi: India’s gross domestic product (GDP) grew 5.4 per cent in October-December (Q3) period of current financial year as compared to 8.4 per cent in the previous quarter, National Statistical Office (NSO) data showed on Monday.
“GDP at Constant (2011-12) Prices in Q3 of 2021-22 is estimated at Rs 38.22 lakh crore, as against Rs 36.26 lakh crore in Q3 of 2020-21, showing a growth of 5.4 percent,” NSO said.
Commenting on the GDP numbers, ICRA Chief Economist Aditi Nayar said that while an adverse base was expected to flatten growth in Q3 FY2022, the initial estimates of the NSO are sorely below expectations.
“The most encouraging piece of the disaggregated GDP data is the 7 per cent expansion in private consumption in Q3 FY2022, which coupled with the mild rise in current consumer confidence in January 2022 despite the onset of the third wave, bodes well for the outlook for demand and capacity utilisation.
However, the feeble 2 per cent YoY rise in gross fixed capital formation was the biggest disappointment, reiterating the tentativeness of the investment cycle,” she said.
In its Second Advance Estimate released today, the NSO has estimated the FY22 GDP growth at 8.9 per cent lowering its earlier forecast of 9.2 per cent for the year. Nish Bhatt, Founder and CEO of Millwood Kane International said that the Q3 growth rate of 5.4 per cent is lower than estimates.
“Most components saw a dip, farm output at 2.6 per cent despite a good monsoon year, manufacturing at 0.2 per cent, construction at (-)2.8 per cent despite activity picking up. As expected the FY22 growth projection has been revised downwards to 8.9 per cent.
Rising inflation, energy, and crude oil prices have had a major impact on the growth rate,” Bhatt said. He noted that the worrying part is high government spending failed to lift the growth rate.
“What is even more worrying is that the high crude prices, geo-political (situation) in the January-March quarter will likely put further pressure on the growth rate for full-year FY22.
The high spending, capex heavy budget announced by the government is likely to help with an upward curve in growth rate in FY23. A further spike in crude prices due to geopolitical tension remains a huge risk for India’s growth rate going forward,” he said.
As per NSO, real GDP at constant (2011-12) prices in the year 2021-22 is estimated to attain a level of Rs 147.72 lakh crore, as against the First Revised Estimate of GDP for the year 2020-21 of Rs 135.58 lakh crore, released on January 31.
