Indian economy poised to achieve GDP growth of 10.25 percent in FY22, says PHDCCI

New Delhi: The economy is poised to achieve 10.25 percent GDP growth in FY 2021-22 on the back of effective government policies, Reserve Bank’s accommodative policy stance and improved business sentiments, industry body PHDCCI said on Monday.

The Reserve Bank last week retained the GDP (gross domestic product) forecast for the current financial year at 9.5 percent and flagged global semiconductor shortages, elevated commodity prices and potential global financial market volatility as downside risks to economic growth.

The National Statistical Office, the official agency of the government, on 31 August, had said the real GDP growth for the first quarter of 2021-22 was at 20.1 percent. The RBI projected the GDP growth for the first quarter of the next financial year at 17.2 percent.

In its June policy review, the central bank had lowered the country’s growth projection for the current financial year to 9.5 percent from 10.5 per cent estimated earlier.

The PHD Chamber of Commerce and Industry (PHDCCI) “projects a double digit GDP growth trajectory at 10.25 per cent in FY 2021-22, supported by the effective policies of the government, RBI’s accommodative policy stance and significantly improved business sentiments in the country,” its President Pradeep Multani said.

The declining new coronavirus cases, accelerated vaccination drive, improved consumer and business confidence, anticipated high demand amid upcoming festive season, among others, will further enhance the pace of economic recovery in the coming months, the chamber added.

However, it highlighted the need to address the high commodity prices and shortages of raw material to support the consumption and private investments in the country.

“The drivers of household consumption needs to be further strengthened to enhance the aggregate demand as it will have an accelerated effect on expansion of capital investments,” PHDCCI said.

It urged the Centre to frontload the National Infrastructure Pipeline expenditure arguing that increased spending on infrastructure will give a multiplier effect to rejuvenate the aggregate demand in the economy.