New Delhi: The Indian economy is expected to grow at 9.1 % in the financial year 2021-22 (FY22), industry body FICCI's latest Economic Outlook Survey mentioned on Thursday. The gross domestic product (GDP) projection marks a marginal improvement from the growth forecast of 9% recorded in its previous survey in July.
"Economic recovery, post the second wave of the Covid-19 pandemic, seems to be holding ground and the same is also reflected in the incoming data on various high frequency indicators. The forthcoming festive season should support this momentum," the Federation of Indian Chambers of Commerce and Industry said.
Though, it added a note of caution for the Diwali celebrations and urged to bring "some sense of complacency setting in with regard to the Covid situation" as "the likely surge in people's movement can again lead to a rise in new coronavirus cases."
According to the FICCI survey, the median growth forecast for agriculture and allied activities has been put at 3.2% for FY22. Industry and services sector are projected to grow by 12.9% and 8.6% respectively during the year, the chamber said.
This survey was conducted in September and drew responses of economists from industry, banking and financial services sector.
When asked about the Reserve Bank of India's (RBI's) upcoming monetary policy review, a majority of economists opined that the central bank will maintain status quo on the repo rate and will continue with an accommodative stance. They largely felt that the RBI may indicate a change of stance from accommodative to neutral in the February 2022 policy meeting and a hike in repo rate could happen in the next fiscal year.
The current repo rate -- the rate at which RBI lends money to commercial bank -- stands at 4%.
"The second quarter GDP data and the upcoming festive season should give a clearer idea of where we are headed on the recovery path and how the demand situation is panning out. Moreover, we will also get greater clarity on the covid situation, and the possibility of a third wave post the festive season. Until then, the central bank could continue to resort to milder liquidity draining policies,"
India's economy grew at 20.1% in the first quarter (Q1), ended June 30 (FY22), as against contraction of 24.4% in the Q1 FY21. And, the second quarter (Q2 FY22) GDP data is expected to be released on November 30.
The survey's median forecast for CPI based (retail) inflation rate stood at 5.6% for 2021-22.