According to the finance ministry estimates, India’s GDP is likely to grow at 19 per cent in FY22 after registering record shrinkage in the previous year. Nominal GDP measures a country’s gross domestic product (GDP) using current prices, without adjusting for inflation.
N K Singh, the chairman of the Fifteenth Finance Commission (FFC) told Mint that the estimate is more modest compared to the optimistic assessments that experts had given to the FFC. The Chief Economic Advisor said in a presentation that it could go as high as 19 per cent. In extreme cases, the predictions said it could be 21 percent while others expected a more modest figure.
In reference to a presentation made by the Finance Ministry’s Chief Economic Advisor, Krishnamurthy Subramanian, Singh said that it is necessary to make projections about the rebound from a very low base year.
In the first quarter of this financial year, the nominal GDP saw a contraction of 22.6 per cent to Rs 38.08 lakh crore, compared to Rs 49.18 lakh crore in the same period last year. Despite the pandemic causing a contraction, Krishnamurthy Subramanian said that many sectors are on the path to recovery. He highlighted the reforms that have been done on the agricultural side, the labour side and on privatization and said all these will come together to increase productivity and help in economic growth.
Moody’s Investors Service, in their latest forecast on September 11, projected a 10.6 per cent real GDP growth and 4 per cent CPI inflation for FY22. Goldman Sachs Group has estimated a contraction in GDP of 14.8 percent for the year through March 2021. ABD, on the other hand, has forecasted a contraction of 9 per cent. The Reserve Bank of India is expected to release its own growth forecast on October 1.