economy

Icra revises Indias Q2 GDP growth estimate upwards at 7.9%

Icra revises Indias Q2 GDP growth estimate upwards at 7.9%

Ratings agency Icra has revised its GDP growth estimate for India upwards in the second quarter of current financial year to 7.9%. The upwards revision is on the back of an increase in government spending. A jump in government spending in September has led to an upgrade of GDP growth estimate for the second quarter of FY2021-22 to 7.9%, Icra said in a release. The domestic rating agencys earlier estimate for real GDP growth for the July-September period was 7.7%. Indias GDP had surged by over 20% in the first quarter, mainly on a low base as the pandemics first wave raged. The Reserve Bank of India (RBI) has forecast a 9.5% growth rate for the full financial year. Economic activity in Q2 FY22 was supported by a pick-up in industrial and service sector volumes after the second wave of Covid-19 subsided and rising vaccine coverage revived confidence. Additionally, healthy Central and state Government spending, robust merchandise exports and continuing demand from the farm sector supported economic activity in that quarter, its chief economist Aditi Nayar said. Nayar said this would be an improvement when compared to the Covid second wave-hit first quarter of the fiscal. A normalising base is expected to lead to a moderation in the growth when compared with the year-ago period, the agency said. The central governments non-interest revenue expenditure expanded by 15 per cent in Q2FY22, compared to the contraction of 7.3% in Q1FY22. Additionally, for the 22 state governments for which data is available, revenue expenditure expanded by 13.1% in Q2FY22, a step up from the 10.6% growth in Q1FY22. The agency estimates growth by gross value added basis for the industry, services and agriculture, forestry and fishing to come at 8.5%, 7.9% and 3% per cent, respectively, for the quarter. Download.

economy 2021-11-18 Livemint