India Ratings and Research (Ind-Ra) has slashed India’s Gross Domestic Product (GDP) growth to 9.6 percent from 10.1 percent as it had estimated earlier for current financial year (FY 22).
Further, Ind-Ra expects agricultural growth to come in at 3 per cent in FY22. On the other hand, the industrial sector is expected to grow at 10.9 per cent year-on-year because unlike Covid 1.0 industries were allowed to remain operational during Covid 2.0 lockdowns.
Services like aviation, tourism, hotels sports, entertainment and hospitality are still weathering the storm, are expected to grow at 10.4 per cent again chiefly due to the low base of last year.
Wholesale and retail inflation in May came in at 12.5 per cent and 6.3 per cent. It is still too early to believe that the retail inflation will remain in excess of 6 per cent on a sustained basis, given the high base of last year.
It, therefore, expects average retail and wholesale inflation to come in at 5.5 per cent and 6.6 per cent respectively in FY22.