December 2, 2021
Positive government reforms, speedy vaccination drive, calibrated RBI actions, increased consumer and business sentiments boost GDP growth
GDP growth can be credited to broad-based economic expansion as most sectors that were adversely affected by the pandemic have made a recovery
Government expenditure and private consumption grew by 8.7% and 8.6% respectively
High commodity prices and shortages of raw material to support the consumption and private investments in the country need to be looked into
As India’s gross domestic product (GDP) increased 8.4% in the July-September quarter, industry chamber PHD Chamber of Commerce and Industry stated that the country’s overall economic growth will likely be at 10.25% in 2021-22. This sentiment was echoed by Niti Aayog Vice-Chairman Mr. Rajiv Kumar, as he anticipated the economy to increase by more than 10% in the current fiscal year due to a 4.5% growth in the agricultural sector. The manufacturing sector grew by 5.5%, buoyed by increased domestic demand and exports. In addition, there was a 7-8% growth in construction, trade, hotels, transport, and financial services. The largest growth was seen in government services that include public administration and defense, which accounted for a 17.4% increase.
The chamber attributed this growth to proactive government reforms, speedy vaccination drive, calibrated RBI actions, increased consumer and business sentiments, and low base effect. Government expenditure grew by 8.7% and private consumption, which constitutes a major portion of the GDP, increased by almost 8.6%, thus exhibiting growth in the consumer sentiment.
India’s Q2 GDP growth can also be credited to broad-based economic expansion as most sectors that were adversely affected by the pandemic have made a recovery. However, as various COVID-19 variants continue to force global restrictions, maintaining the growth momentum and controlling the outbreak could pose a challenge.