Indian economy is expected to grow beyond 10% in this fiscal: NITI Aayog vice chairman Rajiv Kumar

“We expect India’s real GDP growth in FY22 to exceed 10% supported by a record kharif crop and bright rabi prospects. This will boost rural demand and spur the revival in the manufacturing sector with improving capacity utilisation,” Kumar said in the eighth edition of arthNITI. The government has projected the Indian economy to grow by 9.5% in FY’22.

According to Kumar, significant increase in exports will also boost economic growth and employment generation while the gradual pickup in contact-intensive services sector is further likely to support the growth momentum.

“The rapid vaccination drive across the country will ensure that the risk of future waves is minimised,” he hoped.

Kumar further said that the trade growth in India is rebounding strongly, with much stronger imports than exports, reflecting India’s robust economic recovery. “Higher than expected revenue trends driven by both direct and indirect taxes have provided the much-needed fiscal space for required policy action,”.

Globally too, trade is rebounding faster than global economic growth despite constraints in shipping and logistics, Kumar said. “Inflation is emerging as a key risk to sustainable global economic recovery with supply chain constraints and rising energy prices,” he added.

The International Monetary Fund has projected the global to grow at 5.9% in 2021 with the real GDP of advanced economies projected to expand by 5.2% whereas emerging market and developing economies are expected to grow by 6.4%.