Indian economy poised to attain double-digit growth in FY22: PHDCCI

The economy is poised to achieve 10.25 per cent 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 per cent 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 August 31, had said the real GDP growth for the first quarter of 2021-22 was at 20.1 per cent. The RBI projected the GDP growth for the first quarter of the next financial year at 17.2 per cent.

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