In its second advance estimates of national accounts released on Monday, the National Statistical Office (NSO) forecasted the country’s growth for 2021-22 at 8.9%, slightly lower than the 9.2% estimated in its first advance estimates released in January.
Furthermore, the National Statistics Office (NSO) reduced its estimates of GDP contraction for the coronavirus pandemic-affected last fiscal year (2020-21) to 6.6 percent. The previous projection was for a 7.3% decrease.
In April-June 2020, the Indian economy contracted 23.8 percent, and in July-September 2020, it contracted 6.6 percent.
“While an adverse base was expected to flatten growth in Q3 FY2022, the NSO’s initial estimates are far below our expectations (6.2 percent for GDP), with a marginal increase in manufacturing and a contraction in construction that is surprising given the heavy rains in the southern states,” said Aditi Nayar, Chief Economist at ICRA.
“GDP at constant (2011-12) prices is estimated at Rs 38.22 trillion in Q3 of 2021-22, up from Rs 36.26 trillion in Q3 of 2020-21, indicating an increase of 5.4 percent,” according to an official release.
According to the announcement, real GDP (GDP) or Gross Domestic Product (GDP) at constant (2011-12) prices is expected to reach Rs 147.72 trillion in 2021-22, up from Rs 135.58 trillion in the first updated estimate announced on January 31, 2022.
GDP growth is expected to be 8.9% in 2021-22, compared to a decline of 6.6 percent in 2020-21.
In terms of value, GDP in October-December 2021-22 was Rs 38,22,159 crore, up from Rs 36,22,220 crore in the same period of 2020-21.
According to NSO data, the manufacturing sector’s Gross Value Added (GVA) growth remained nearly steady at 0.2 percent in the third quarter of 2021-22, compared to 8.4 percent a year ago.
GVA growth in the farm sector was weak in the third quarter, at 2.6 percent, compared to 4.1 percent a year before.
GVA in the construction sector decreased by 2.8%, compared to 6.6% rise a year ago.
The electricity, gas, water supply, and other utility services segment grew by 3.7 percent in the third quarter of current fiscal year, compared to 1.5 percent growth the previous year.
Similarly, trade, hotel, transportation, communication, and broadcasting services expanded by 6.1 percent, compared to a decline of 10.1 percent a year ago.
In Q3 FY22, financial, real estate, and professional services growth was 4.6 percent, compared to 10.3 percent in Q3 FY21.
During the quarter under examination, public administration, defense, and other services expanded by 16.8%, compared to a decrease of 2.9 percent a year earlier.
Meanwhile, China’s economy grew by 4% between October and December of 2021.
“India’s GDP growth for Q3FY22 was a touch lower than our forecast of 5.7 percent, as the manufacturing sector grew slowly and the construction industry experienced unanticipated de-growth.” We have, however, decisively emerged from the pandemic recession, with all sectors of the economy showing signs of recovery.
“Going ahead, unlock trade will help growth in Q4FY22, as most governments have eliminated pandemic-related limitations, but weak rural demand and geopolitical shock from the Russia-Ukraine conflict may impair global growth and supply chains.” The impending pass-through of higher oil and gas costs could affect domestic demand mood, according to Elara Capital economist Garima Kapoor.
“Strong growth in the services sector and a pick-up in private final consumption expenditure drove India’s real GDP growth to 5.4 percent in Q3.” While agriculture’s growth slowed in Q3, the construction sector’s growth became negative.
“On the plus side, actual expenditure levels in both the private and public sectors are greater than they were before the pandemic.
“Given the encouraging trends in government revenues and spending until January 2022, as well as the upward revision in the nominal GDP growth rate for FY22, the fiscal deficit to GDP ratio for FY22 may come out better than what the (federal) budget projected,” said Rupa Rege Nitsure, group chief economist, L&T Financial Holdings.
“The growth number is pretty disappointing,” Sujan Hajra, chief economist of Mumbai-based Anand Rathi Securities, said, citing weaker rural consumer demand and investments as reasons.
After crude prices soared beyond $100 a barrel, India, which imports virtually all of its oil, might face a wider trade imbalance, a weaker rupee, and greater inflation, with a knock to GDP considered as the main concern.
“We believe the fiscal and monetary policy accommodation will remain, given the geopolitical volatility and crude oil prices,” Hajra added.
According to Nomura, a 10% increase in oil prices would shave 0.2 percentage points off India’s GDP growth while adding 0.3 to 0.4 percentage points to retail inflation.
Widening sanctions against Russia are likely to have a ripple impact on India, according to Sakshi Gupta, senior economist at HDFC Bank.
“We see a 20-30 basis point downside risk to our base predictions,” she said. For the time being, HDFC expects the GDP to rise 8.2% in the coming fiscal year.
Is India’s economy the most dynamic?
(ANI): New Delhi, Feb. 1 (ANI): According to the World Bank, Asian Development Bank, and International Monetary Fund’s predictions in the Economic Survey 2021-22 released on Monday, India will remain the world’s fastest-growing major economy from 2021 to 2024.
The Economic Survey 2021-22, which was tabled in Parliament today by Union Minister for Finance and Corporate Affairs Nirmala Sitharaman, states that the year ahead is well poised for a pick-up in private sector investment, with the financial system in a good position to support the economy’s revival.
The growth forecast for 2022-23 is based on the assumption that there will be no further debilitating pandemic-related economic disruptions, that the monsoon will be normal, that global liquidity withdrawal by major central banks will be orderly, that oil prices will be in the USD70-USD75/bbl range, and that global supply chain disruptions will gradually ease over the course of the year.
According to the yearly poll, the aforesaid prognosis is equivalent to the World Bank’s and Asian Development Bank’s recent forecasts of 8.7% and 7.5 percent real GDP growth for 2022-23, respectively. India’s real GDP is expected to rise at 9% in both 2021-22 and 2022-23, and at 7.1 percent in 2023-24, according to the IMF’s latest World Economic Outlook (WEO) growth predictions announced on January 25, 2022. In all three years, India is expected to be the world’s fastest-growing major economy.
According to the Survey’s First Advance Estimates, the Indian economy is expected to increase by 9.2% in real terms in 2021-22, following a contraction of 7.3 percent in 2020-21. Almost all data reveal that the “second wave” in Q1 had a far smaller economic impact than the full lockdown period in 2020-21, despite the fact that the health damage was much worse.
Agriculture and associated industries have been the least affected by the pandemic, according to the survey, and are anticipated to rise by 3.9 percent in 2021-22, up from 3.6 percent the previous year. The area planted in Kharif and Rabi crops, as well as wheat and rice production, has gradually increased over time.
According to Survey, the industrial sector experienced a sharp turnaround from a 7% decline in 2020-21 to an 11.8 percent expansion this fiscal year. The manufacturing, construction, and mining sub-sectors all had a similar swing, however the utilities sector saw a more subdued cycle, as basic supplies like electricity and water were maintained even throughout the national lockdown. The contribution of industry to GVA is presently estimated to be 28.2%.
According to the survey, the services industry has been hurt the most by the epidemic, particularly parts involving human contact. Following a decrease of 8.4% last year, this industry is expected to rise by 8.2% this fiscal year.
Both the finance/real estate and public administration categories are now significantly higher than they were prior to COVID.
Travel, trade, and hotels, on the other hand, have yet to fully recover. Even while tourism earnings have dropped substantially, software and IT-enabled services exports have exploded.
According to the survey, total consumption is expected to increase by 7.0 percent in 2021-22, with government consumption continuing to be the largest contributor, as it was the previous year. Government consumption is expected to increase by 7.6%, above pre-pandemic levels. Private consumption is also anticipated to have improved dramatically, recovering 97 percent of pre-pandemic output levels, and it is expected to witness a stronger rebound with increased vaccine coverage and faster economic activity normalization.
According to the survey, investment, as measured by Gross Fixed Capital Formation (GFCF), is predicted to expand by 15% in 2021-22, bringing it back to pre-pandemic levels.
In terms of exports and imports, merchandise exports in 2021-22 exceeded USD30 billion for eight months in a row. In terms of demand, India’s overall exports are predicted to increase by 16.5% in 2021-22, reaching pre-pandemic levels. In 2021-22, imports are predicted to increase by 29.4 percent, reaching pre-pandemic levels.
Moreover, despite all of the disruptions caused by the global pandemic, India’s balance of payments has been in surplus for the past two years, according to the Survey. The Reserve Bank of India was able to continue collecting foreign exchange reserves, which reached USD634 billion on December 31, 2021. This is more than the country’s external debt and equals 13.2 months of imports. (ANI)
What accounts for India’s low GDP?
There are two things that stand out. The Indian economy began to revive in March 2013 more than a year before the current government took office after a period of contraction following the Global Financial Crisis.
But, more importantly, since the third quarter of 2016-17 (October to December), this recovery has transformed into a secular slowing of growth. While the RBI did not declare so, many experts believe the government’s move to demonetise 86 percent of India’s currency overnight on November 8, 2016, was the catalyst that sent the country’s GDP into a tailspin.
The GDP growth rate steadily fell from over 8% in FY17 to around 4% in FY20, just before Covid-19 hit the country, as the ripples of demonetisation and a poorly designed and hastily implemented Goods and Services Tax (GST) spread through an economy already struggling with massive bad loans in the banking system.
PM Modi voiced hope in January 2020, when GDP growth fell to a 42-year low (in terms of nominal GDP), saying: “The Indian economy’s high absorbent capacity demonstrates the strength of the country’s foundations and its ability to recover.”
The foundations of the Indian economy were already weak in January last year well before the outbreak as an examination of key factors shows. For example, in the recent past (Chart 2), India’s GDP growth trend mirrored an exponential development pattern “Even before Covid-19 came the market, there was a “inverted V.”
Will India achieve superpower status?
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President Vladimir Putin has stated that the United States and Russia no longer determine the answers to the world’s most pressing concerns.
He went on to say that due to the United States’ diminishing influence, China and Germany are on their way to becoming superpowers.
With a GDP of about $3 trillion, India is ranked 13th on the list. Its diverse talent pool and low-cost connectivity are key aspects that will help it rise in the rankings in the future.
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India’s strength derives in its strategic location in the changing Asian power balance.
As a result, countries like the United States, Japan, and Australia are collaborating with India to counter China’s expanding influence in the Indo-Pacific.
India’s Purchasing Power Parity (PPP) GDP rose by 772 percent from $1 trillion to $9 trillion between 1991 and 2019.
However, between 1960 and 2021, the country’s population increased by 209%, from 450 million to 1.39 billion people.
While this lowers per capita income, it will keep the country’s labor force young and large in the long run.
This will provide India a significant economic advantage over the United States, China, and the European Union, all of which will see their labor force fall over the next 30 years.
By 2050, India’s PPP is predicted to surpass that of the United States, making it the world’s second-largest economy after China.
India is focusing on many large-scale megaprojects to construct a golden quadrilateral between its metropolitan cities in order to improve its infrastructure.
It is focusing on a $75 billion national highways and roadways programme named ‘Bharatmala’ and a $116 million project called ‘Sagarmala’ to create new mega ports and establish 14 coastal economic zones, in addition to its 11 corridor projects.
In the last three decades, India has committed 2.5 percent of its GDP to defense spending. As a result, the country’s defense budget, as well as its economy, are soaring.
India spent $71 billion on its military in 2019, nearly tripling its budget from a decade ago.
With growing digitalisation, India has the potential to become a superpower, with a booming high-tech sector and premium educational institutes.
Despite the fact that increasing competition promotes faster economic growth and technical innovation, most economies remain resistant to change.
The fast rise of military and economic power frequently leads to armed conflict. Harnessing the spirit of challenge while avoiding the ripple effect is a huge problem.
Can India become a developed nation?
India is regarded as one of the world’s potential superpowers. This potential is linked to a number of factors, the most important of which are the country’s demographic trends as well as its fast developing economy and military. With a projected GDP growth rate of 5% in 2015, India became the world’s fastest growing economy (mid year terms). To be regarded a superpower, the country must overcome numerous economic, social, and political issues, as well as be as prominent on the international scene as the United States, European Union, China, the former British Empire, and the former Soviet Union.
What accounts for India’s high GDP?
India’s long-term prosperity has been fueled by an increasing share of investment and exports, with consumption playing a significant role. Productivity advances both in labor productivity and total factor productivity have also characterized growth.
What accounts for Japan’s high GDP?
Japan has one of the world’s largest and most sophisticated economies. It boasts a highly educated and hardworking workforce, as well as a huge and affluent population, making it one of the world’s largest consumer marketplaces. From 1968 to 2010, Japan’s economy was the world’s second largest (after the United States), until China overtook it. Its GDP was expected to be USD 4.7 trillion in 2016, and its population of 126.9 million has a high quality of life, with a per capita GDP of slightly under USD 40,000 in 2015.
Japan was one of the first Asian countries to ascend the value chain from inexpensive textiles to advanced manufacturing and services, which now account for the bulk of Japan’s GDP and employment, thanks to its extraordinary economic recovery from the ashes of World War II. Agriculture and other primary industries account for under 1% of GDP.
Japan had one of the world’s strongest economic growth rates from the 1960s to the 1980s. This expansion was fueled by:
- Access to cutting-edge technologies and major research and development funding
- A vast domestic market of discriminating consumers has given Japanese companies a competitive advantage in terms of scale.
Manufacturing has been the most notable and well-known aspect of Japan’s economic development. Japan is now a global leader in the production of electrical and electronic goods, automobiles, ships, machine tools, optical and precision equipment, machinery, and chemicals. However, in recent years, Japan has given some manufacturing economic advantage to China, the Republic of Korea, and other manufacturing economies. To some extent, Japanese companies have offset this tendency by shifting manufacturing production to low-cost countries. Japan’s services industry, which includes financial services, now accounts for over 75% of the country’s GDP. The Tokyo Stock Exchange is one of the most important financial centers in the world.
With exports accounting for roughly 16% of GDP, international trade plays a key role in the Japanese economy. Vehicles, machinery, and manufactured items are among the most important exports. The United States (20.2%), China (17.5%), and the Republic of Korea (17.5%) were Japan’s top export destinations in 2015-16. (7 per cent). Export growth is sluggish, despite a cheaper yen as a result of stimulus measures.
Japan’s natural resources are limited, and its agricultural sector is heavily regulated. Mineral fuels, machinery, and food are among Japan’s most important imports. China (25.6%), the United States (10.9%), and Australia (10.9%) were the top three suppliers of these items in 2015. (5.6 per cent). Recent trade and foreign investment developments in Japan have shown a significantly stronger involvement with China, which in 2008 surpassed the United States as Japan’s largest trading partner.
Recent economic changes and trade liberalization, aiming at making the economy more open and flexible, will be critical in assisting Japan in dealing with its problems. Prime Minister Abe has pursued a reformist program, called ‘Abenomics,’ since his election victory in December 2012, adopting fiscal and monetary expansion as well as parts of structural reform that could liberalize the Japanese economy.
Japan’s population is rapidly aging, reducing the size of the workforce and tax revenues while increasing demands on health and social spending. Reforming the labor market to increase participation is one of the strategies being attempted to combat this trend. Prime Minister Shinzo Abe’s ‘Three Arrows’ economic revitalisation strategy of monetary easing, ‘flexible’ fiscal policy, and structural reform propelled Japan’s growth to new heights in 2013.
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Which country is the most powerful in the world?
In the 2021 Best Countries Report, Canada takes the top overall spot as the world’s number one country for the first time. After coming in second place in the 2020 report, Canada has now eclipsed Switzerland in the 2021 report, with Japan, Germany, Switzerland, and Australia following closely behind.
Is Pakistan poorer than India?
With a GDP of $2,709 billion dollars in 2020, India’s GDP will be about ten times that of Pakistan’s $263 billion dollars. The disparity is larger in nominal terms (almost ten times) than in ppp terms (8.3 times). In nominal terms, India is the world’s fifth largest economy, while in ppp terms, it is the third largest. Pakistan has a nominal ranking of 48 and a PPP ranking of 24. Maharashtra, India’s most economically powerful state, has a GDP of $398 billion, far exceeding Pakistan’s. Tamil Nadu, India’s second-largest economy ($247 billion), is relatively close. The gap between these two countries was at its narrowest in 1993, when India’s nominal GDP was 5.39 times that of Pakistan, and at its widest in 1973. (13.4x).
In terms of gdp per capita, the two countries have been neck and neck. For only five years between 1960 and 2006, India was wealthier than Pakistan. In 1970, Pakistan’s GDP per capita was 1.54 times that of India. Since 2009, the margin has widened in India’s favor. On an exchange rate basis, India’s per capita income was 1.56 times more than Pakistan’s in 2020, with an all-time high of 1.63x in 2019. The previous year, Pakistan was wealthier than India. Both countries rank near the bottom of the world in terms of GDP per capita. India is ranked 147 (nominal) and 130 (absolute) (PPP). Pakistan is ranked 160 (nominal) and 144 in the world (PPP). There are 28 Indian states/UTs that are wealthier than Pakistan.
In 2020, India’s gdp growth rate (-7.97) will be lower than Pakistan’s (-0.39) after 19 years. India’s GDP growth rate reaches a high of 9.63 percent in 1988 and a low of -5.24 percent in 1979. Pakistan’s inflation rate peaked at 11.35 percent in 1970 and peaked at 0.47 percent in 1971. Pakistan expanded by more than 10% in three years from 1961 to 2017, while India never did. India’s GDP growth rate has been negative for four years, whereas Pakistan’s growth rate has never been negative.
According to the CIA Fackbook, India’s GDP composition in 2017 was as follows: agriculture (15.4%), industry (23%), and services (23%). (61.5 percent ). Agriculture (24.7 percent), Industry (19.1 percent), and Services account for the majority of Pakistan’s GDP in 2017. (56.3 percent ).
Is India more impoverished than Africa?
Acute poverty is prevalent in eight Indian states, including Bihar, Uttar Pradesh, and West Bengal, according to a new UNDP measure termed the Multi-dimensional Poverty Index (MPI). They have more poor people than the 26 poorest African countries put together.
The Oxford Poverty and Human Development Initiative, with UNDP financing, created and used a new measure called the Multidimensional Poverty Index. The indicator reflects the nature and scope of poverty at several levels, ranging from the household to regional, national, and worldwide levels.
According to its designers, there are more poor people in eight Indian states (421 million in Bihar, Chattisgarh, Jharkhand, MP, Orissa, Rajasthan, UP, and West Bengal) than there are in the 26 poorest African countries combined (410 million).
Since 1997, the Human Poverty Index has been included in the Annual Human Development Reports, however the MPI has replaced it.
From education to health outcomes to assets and services, the MPI evaluates a variety of essential characteristics or deprivations at the household level. When these indicators are considered combined, they provide a more complete picture of acute poverty than basic income metrics.
India is home to 1/3 of the world’s poor. It also has a higher percentage of people living on less than $2 per day than even Sub-Saharan Africa.
75.6 percent of the population, or 828 million people, live on less than $2 a day.
42% of the population is poor, according to the new international poverty level.
Indians account for 33% of the world’s poor, or 14 billion people. The situation in Sub-Saharan Africa, the world’s poorest region, is improving.
With a monthly per capita consumer spend of Rs 447, 41.8 percent of the rural population makes ends meet.
They barely spend Rs 447 on basic necessities such as food, gasoline, light, and clothing.
According to current estimates from the Planning Commission, India’s poverty rate fell from 35.97 percent in 1993-94 to 27.54 percent in 2004-05.
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