NSO Estimates on FY22 GDP Growth

January 8, 2022

According to first advance estimates of National Statistical Office (NSO), India’s gross domestic product (GDP) is estimated to grow 9.2% in the financial year 2021-22.

What is supporting the growth?

Growth in GDP is supported by an uptick in the farm sector output, mining sector output and manufacturing sector outputs.

What was the scenario in 2020-21?

In 2020-21, GDP had contracted to 7.3 percent, amid the covid-19 induced lockdown.

NSO vs RBI estimate

  • The NSO estimate is lower as compared to GDP forecast by RBI in December 2021 policy review. RBI had projected a GDP growth of 5 per cent.
  • The RBI has further estimated the growth of 6.6 per cent and 6 percent respectively in the third quarter (Oct-Dec 2021) and fourth quarter (Jan-Mar 2022).

NSO’s estimate

  • As per NSO data, absolute GDP and Gross Value Added (GVA) will recover and better the numbers as compared to 2019-20.
  • Government’s spending will remain buoyant. Investments have picked up and are likely to be more than the level in 2019-20.
  • Demand is expected to remain sluggish, at 55 per cent of the GDP, lower than the level in 2019-20.
  • Government final consumption expenditure is expected to be 7.6 per cent more than FY21 while 10.7 per cent more than FY20.
  • Investment activity has also increased and buoyant gross fixed capital formation (GFCF) is growing by 14.9 per cent in FY22, 2.6 per cent more than 2019-20.

Private final consumption expenditure (PFCE)

Impact of the Covid-19 pandemic is still visible on private final consumption expenditure (PFCE). PFCE is likely to grow 6.8 per cent. It will be at Rs 80.80 lakh crore for FY22, lesser than pre-pandemic level of Rs 83.21 lakh crore.

Growth in different sectors

Agriculture is likely to grow at 3.9 per cent in FY22 as compared to 3.6 per cent growth in FY21. Manufacturing sector is growing by 12.5 per cent. Electricity generation is likely to grow 8.5 per cent as compared to 1.9 per cent last year. Services like trade, hotels and transport are estimated to grow at 11.9 per cent.

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