The economic growth during the current financial year i.e. in 2021-22 has been revised to 9 per cent from its earlier estimate of 8.5 per cent by rating agency ICRA, mainly due to a rise in Coronavirus vaccination drive across the country and encouraging advanced estimates of kharif crops.
In a statement issued by ICRA on Monday, the agency said that gradually widening coverage of vaccination against the Coronavirus-induced infection is expected to propel confidence, which in turn will boost demand for “contact-intensive services”.
The 9 per cent growth projection given by ICRA, is slightly below the expectations of the Reserve Bank of India (RBI), which foresees the economy to grow at 9.5 per cent during the current fiscal.
Initially there were expectations that the economy will grow at a healthier rate during 2021-22, however after the raging second wave of Coronavirus, observers became skeptical about an upward trend.
Meanwhile ICRA said that the second half of the current financial year is likely to witness positive growth, which could support its 9 per cent growth projection.
ICRA's chief economist Aditi Nayar said that a robust kharif crop is likely to boost consumption requirements while increase in government's expenditure after the withdrawal of the previous cash management norms is also expected to push demand.
However at the same time, the danger of the third wave of infection could put at risk the agency's GDP projections for the fiscal, she noted.
The agency observed that around three-fourths of adults in the country are likely to receive their second vaccine dose by the end of the year, provided the average 7.9 million daily doses which were registered in September, is maintained.