India GDP Growth News LIVE Updates: Fiscal deficit for 2021-22 at 6.7 pc of GDP, lower than earlier estimate numbers


India GDP Live Updates: Fiscal deficit for 2021-22 worked out to be 6.71 per cent of the gross domestic product (GDP), lower than 6.9 per cent projected by the Finance Ministry in the revised Budget Estimates, according to government data released on Tuesday. Unveiling the revenue-expenditure data of the Union government for 2020-21, the Controller General of Accounts (CGA) said that the fiscal deficit in the absolute terms was be Rs 15,86,537 crore (provisional). The revenue deficit at the end of 2021-22 was 4.37 per cent. For the last financial year, the government had initially pegged the fiscal deficit at 6.8 per cent of the GDP in the budget presented in February 2021. The government in the revised estimates in the Budget for 2022-23 forecast a higher fiscal deficit of 6.9 per cent of the GDP or Rs 15,91,089 crore for the fiscal ended in March.

Meanwhile, India’s GDP growth for the fourth quarter of FY22 will be released today. India’s economy likely slowed in the fourth quarter and is expected to grow between 3.5-5.5 percent, economists predict. Soaring prices and the subsequent hit to consumer spending and investments have further hampered the growth of India’s economy, as the central bank faces a finely balanced struggle to tame inflation via rate hikes without hurting economic growth, economists asserted. The economy’s near-term prospects have been darkened by a spike in retail inflation, which hit an eight-year high of 7.8% in April. The surge in energy and commodity prices following the Ukraine crisis is also exerting a drag on economic activity. High-frequency indicators showed supply shortages and higher input prices were weighing on output in the mining, construction and manufacturing sector, even as credit growth has picked up and states are spending more. Indian consumer sentiment slid in early May, dipping for the second month in a row, as rising fuel prices and broader inflation hit household finances.

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The Provisional data indicates that the fiscal deficit of the Government of India (GoI) was contained marginally below the FY2022 revised estimate, benefitting from the higher tax (+Rs. 0.55 trillion) and non tax (+Rs. 0.34 trillion) revenue receipts and lower capital spending (-Rs. 0.1 trillion), which absorbed the deficit in non debt capital receipts (-Rs. 0.61 trillion) and higher revenue expenditure (+Rs. 0.34 trillion)

– Aditi Nayar, ICRA chief economist

Fiscal deficit at 6.71 pc of GDP in 2021-22 against revised budget estimate of 6.9 pc

  • Fiscal deficit for 2021-22 worked out to be 6.71 per cent of the gross domestic product (GDP), lower than 6.9 per cent projected by the Finance Ministry in the revised Budget Estimates, according to government data released on Tuesday.
  • Unveiling the revenue-expenditure data of the Union government for 2020-21, the Controller General of Accounts (CGA) said that the fiscal deficit in the absolute terms was be Rs 15,86,537 crore (provisional). The revenue deficit at the end of 2021-22 was 4.37 per cent. For the last financial year, the government had initially pegged the fiscal deficit at 6.8 per cent of the GDP in the budget presented in February 2021.
  • The government in the revised estimates in the Budget for 2022-23 forecast a higher fiscal deficit of 6.9 per cent of the GDP or Rs 15,91,089 crore for the fiscal ended in March.

FY22 Fiscal deficit at 6.7% vs 6.9% revised estimate

The central government’s fiscal deficit for FY22 has come in at 6.7%, undershooting the revised target by 20 bps, data showed on Tuesday. As per the Budget 2022, the fiscal deficit was revised to Rs 15.91 lakh crore. The deficit is Rs 4,552 crore lower than the actual fiscal deficit of Rs 15.87 lakh crore.

PCE growth

As per ICICI Securities, nominal private consumption expenditure (PCE) grew 16.8% (after contracting 3% in CY20) and real PCE grew 9.1% (after contracting 7.3% in CY20). Private consumption saw a 7% expansion on an annual basis in the Q3FY22 reading. Analysts have attributed faster growth in passenger traffic, petrol sales, and personal credit for the strength seen in private consumption.

GFCF growth

The Gross Fixed Capital Formation (GFCF) saw a growth of roughly 2% in the third quarter of the previous fiscal. It was only 1.4% higher than the pre-Covid level which shows the tentativeness of the investment cycle. It had grown by 14.6% YoY in the previous quarter & has been forecast to ease to 1.3%.

Manufacturing growth

Manufacturing saw a marginal rise of 0.2% in Q3. The rising input costs are likely to have taken a toll on their activity and may have hurt corporate margins. The sector had grown 5.6% in Q2.

Growth trends

Growth trends

Other sectors

Contact-intensive sectors are expected to make stronger recovery, and the economy is projected to grow by 5.5 per cent in Q4 FY22 against 5.4 per cent in Q3, a BoB note said. A much needed pick up will be visible in services sector, with travel and hospitality contributing significantly. Construction is also likely to edge upwards.

India’s economy seen growing 9.2 pc in FY22, says BoB

India’s economy is expected to have grown at 9.2 per cent in the fiscal ended March 2022, after having contracted by 7.3 per cent in the previous financial year, aided by resilience in the rural economy, uptick in bank credit and rising GST collections, a note by Bank of Baroda said. As per government’s advance estimates, the gross domestic product (GDP) in FY22 is projected to grow by 8.9 per cent. The National Statistical Office (NSO) will release the final GDP growth figures for FY22 on May 31.

Expecting GDP growth of 7-7.5% in FY23

– Dr Samiran Chakraborty, Chief Economist, India, Citigroup

Bank of Baroda on agriculture growth

Agriculture growth might be a tad slow as compared to government expectations (3.3 per cent against government estimate of 3.5 per cent) owing to lower yield of wheat crops, conflict between Russia-Ukraine and heat wave conditions, BoB said.

There are clear signs of demand revival and private consumption. There are also indications of a pickup in private investment. Our growth scenario looks far more comfortable and better than other countries.

– RBI Governor Shaktikanta Das

Omicron’s economic toll

The Omicron driven third wave of Covid-19 in India, peaked on January 25. Though, the impact of that wave was low in terms of fatalities, it hampered the economic activities and brought down the overall growth expectations. NSO in its February numbers for 2021-22, projected annual GDP growth at 8.9%. Accordingly,, annual growth rate was pegged at 4.8% in the quarter ending March. Meanwhile, a Bloomberg forecast of economists expects the March 2022 quarter growth to be 3.8%. On the other hand, for fiscal year 2021-22, GDP growth is expected to be 8.8%.

Monsoon hopes

India is likely to receive normal monsoon rains in 2022, the state-run weather office said on Tuesday, the fourth straight year of normal or above normal summer rains that spur farm and overall economic growth in Asia’s third-biggest economy. India is likely to receive 103% rainfall of a long-term average this year, the IMD said. The IMD defines average, or normal, rainfall as between 96% and 104% of a 50-year average of 87 cm (35 inches) for the entire four-month season beginning in June.

Ahead of GDP data, India 10-year bond yield rises to 3-week high

India’s benchmark 10-year bond yield touched a three-week high in early trade on Tuesday, as global crude oil prices rose further raising concerns over the need for the central bank to tighten monetary policy aggressively to contain inflation. The benchmark bond yield was trading at 7.46% by 11:36 am, its highest since May 9. Oil prices extended gains after the EU agreed to slash oil imports from Russia, fuelling worries of a tighter market already strained for supplies amid rising demand ahead of peak U.S. and European summer driving season. “Crude is holding above $120 a barrel. It is likely to keep the upward pressure on domestic inflation, so expectations that inflation will start easing may not necessarily materialise,” a senior trader at a foreign bank said. India imports nearly 85% of its oil needs and high crude pushes up imported inflation. Traders will be looking at the GDP data for near-term cues.

Official data for Q4 GDP for India is likely to register at 2.7 per cent, and for the entire fiscal FY22 at 8.5 per cent

– Deepak Jasani, Head of Retail Research, HDFC Securities

All eyes on GDP data

Indian shares fell on Tuesday ahead of key economic growth data, while a rally in technology stocks lost steam and Sun Pharmaceutical Industries dropped after the company posted a loss for the March quarter. The NSE Nifty 50 index was down 0.58% at 16,563.20, as of 9:57 am, while the S&P BSE Sensex fell 0.73% to 55,517.99. Over the last three sessions, both indexes rose helped by a rally in beaten down technology stocks. On Monday, the benchmark indexes added nearly 2%, as auto stocks also joined a broader rally after upbeat March-quarter results from Mahindra and Mahindra.

Govt in firefighting mode

The rupee’s nearly 4% depreciation against the dollar this year has also made imported items costlier, prompting the federal government to restrict wheat and sugar exports and cut fuel taxes, joining the RBI in the battle against inflation.

Another dampener

Unemployment rose to 7.83% in April from 7.57% in March, according to the Centre for Monitoring Indian Economy.

Reuters poll

Asia’s third-largest economy probably grew 4.0% in the January-March quarter from a year earlier, a Reuters poll showed last week. That would be the slowest pace in a year, following 5.4% growth in the previous quarter. Forecasts for the data, due at 1200 GMT on Tuesday, ranged from 2.8% to 5.5% in the May 23-26 survey of 46 economists.

India’s growth story in trouble?

As soaring fuel and edible oil prices continue to push inflation to an unbearable level for the common man in India, economies across the world are also reeling under pressure due to current geo-political tensions caused by Russia-Ukraine conflict. All these factors may dent India’s growth story too – in a big way. Today’s GDP numbers would give us some idea, where the economy is heading.

Higher input costs and supply side pressures could slow down the growth rate. We forecast India’s economic growth slowed to 3.7% year-on-year.

– Rahul Bajoria, chief economist, Barclays India

Macro cues: Factory output growth picked up, rising 1.9% in March from 1.5% in the previous month, aided by electricity and mining. The output growth of eight infrastructure industries slowed to 4.3% from 6% in February as coal and crude oil output fell from a year ago.

Other indicators of consumer activity were encouraging though, with bank credit growing 11.1% toward the end of last month from 9.6% in end-March. Liquidity conditions continued to remain in surplus.

Other indicators of consumer activity were encouraging though, with bank credit growing 11.1% toward the end of last month from 9.6% in end-March. Liquidity conditions continued to remain in surplus.

Exports grew at this year’s fastest pace, rising 30.7% in April from a year ago to $40.2 billion, although in value terms that was lower than the $42.2 billion seen a month prior.

Exports grew at this year’s fastest pace, rising 30.7% in April from a year ago to $40.2 billion, although in value terms that was lower than the $42.2 billion seen a month prior.

Needle on the dial measuring so-called ‘Animal Spirits’ remains steady at 5 for the 10th straight month

Needle on the dial measuring so-called ‘Animal Spirits’ remains steady at 5 for the 10th straight month

We believe the GDP projection for Q4FY22 is clouded by significant uncertainties. For example, even a 1 per cent downward revision in Q1 GDP estimates of FY22 from 20.3 per cent, all other things remaining unchanged could push Q4 GDP growth to 3.8 per cent,

– SBI Ecowrap report

Agricultural growth is expected to have slipped to 2.5% in the January-March 2022 quarter, from 2.6% in the previous quarter

The currency has seen a series of record lows in recent weeks amid investment outflows of more than $20 billion this year

The currency has seen a series of record lows in recent weeks amid investment outflows of more than $20 billion this year

Growth projections

Growth projections

Monsoon relief: The monsoon arrived earlier than normal in India, raising hopes that output of crops like rice and oilseeds will get a boost after a brutal heat wave hit winter-sown wheat and prompted the nation to restrict exports.

Brent crude climbs above $120/bbl as EU leaders agree to ban export of Russian oil to the bloc

Warning signs

India’s consumer price inflation will overshoot the central bank’s target range this year to average around 7.5%, a former member of the monetary policy committee said, with the benchmark repo rate likely to rise as high as 6% by the end of the tightening cycle.

India’s coordinated fiscal and monetary efforts to tame inflation, plus a good agricultural production outlook, may take pressure off the central bank to aggressively raise interest rates later in the year

– Rama Subramaniam Gandhi,former RBI official

Asia’s third largest economy had just begun recovering from the pandemic-induced slump when a surge in Omicron cases in January brought back some of the virus-related restrictions. The war in Ukraine, in February, further added to its woes, pushing up commodity prices and squeezing supplies further.

Asia’s third largest economy had just begun recovering from the pandemic-induced slump when a surge in Omicron cases in January brought back some of the virus-related restrictions. The war in Ukraine, in February, further added to its woes, pushing up commodity prices and squeezing supplies further.

FY22 GDP growth seen at 8.2-8.5%: SBI Ecowrap report

SBI research report Ecowrap estimated India’s FY22 GDP growth to fall between 8.2-8.5% and Q4 growth is projected at 2.7%

Reduction in excise duty on fuel last week

Last week, the government had cut excise duty on petrol by a record Rs 8 per litre and that on diesel by Rs 6 per litre to give relief to consumers battering under high fuel prices that has also pushed inflation to a multi-year high.

Cut in excise duty on fuel

Recent cut in excise duties on petrol and diesel will help boost sentiments and improve consumers’ disposable incomes.

Q4 was a challenging quarter: Aditi Nayar

Icra’s Chief Economist Aditi Nayar said Q4 was a challenging quarter, with the Omicron-fuelled third wave of Covid-19 arresting the momentum in contact-intensive services, and a pervasive pressure on margins from higher commodity prices.

NSO to release Q4 numbers today

The National Statistical Office (NSO) will release the fourth quarter numbers of fiscal 2022 on May 31

Economic growth in fourth quarter

The economic growth may have slowed to 3.5 per cent in fourth quarter of 2021-22 from 5.4 per cent in the previous three-month period due to the impact of higher commodity prices on margins, decline in wheat yields and on higher base, Icra Ratings said on Monday.



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