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In News
- Recently, the National Statistical Office (NSO) released the First Advance Estimates (FAE) for the current financial year (2021-22 or FY22).
What are the First Advance Estimates of GDP?
Methodology
Significance
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Key takeaways
- GDP Growth: India’s gross domestic product (GDP) is expected to grow by 9.2% in the current financial year following last fiscal’s 7.3% contraction.
- It is supported by an uptick in the farm, mining and manufacturing sector outputs
- There is significant growth in ‘mining and quarrying (14.3%), and ‘trade, hotels, transport, communication and services related to broadcasting’ (11.9%).
- Manufacturing is seen expanding by 12.5% after shrinking by 7.2% in the previous 12-month period.
- The agriculture sector is estimated to see a growth of 3.9% in FY22, higher than the 3.6% expansion recorded in the previous financial year
- Low Private Consumption: private consumption demand will continue to remain low and investments in the economy, and government expenditure is expected to improve.
- Private consumption expenditures typically account for more than 55% of all GDP.
- Its level is expected to stay substantially the 2019-20 level. Such weak levels of private demand will make it difficult to sustain economic growth in the months and years ahead.
Image Courtesy: IE
NSO Comparison with RBI
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Other related projections for the Indian Economy
- International Monetary Fund (IMF): the 9.5% forecast by the International Monetary Fund (IMF).
- Moody’s Investors Service had in recent weeks put India’s growth forecast at 9.3%.
- Fitch Ratings has projected an 8.7% expansion.
- IHS Markit: India is likely to overtake Japan as Asia’s second-largest economy by 2030 when its GDP is also projected to surpass that of Germany and the U.K. to rank as the world’s No.3.
- Currently, India is the sixth-largest economy, behind the U.S., China, Japan, Germany and the U.K.
- The rapidly growing consumer market as well as its large industrial sector have made India an increasingly important investment destination for multinationals in many sectors, including manufacturing, infrastructure and services.
- Impacts: This rapid pace of economic expansion would result in the size of Indian GDP exceeding Japanese GDP by 2030, making India the second-largest economy in the Asia-Pacific region.
- By 2030, the Indian economy would also be larger in size than the largest Western European economies of Germany, France and the U.K.
- Currently, India is the sixth-largest economy, behind the U.S., China, Japan, Germany and the U.K.
Gross Domestic Product
Gross Value Added
(Image Courtesy: EH) |
Image Courtesy: TH
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