India's Q2 GDP likely to grow 8.1%, says SBI research report

FY22 projection raised to 9.3-9.6% range

The country's GDP growth is likely to be around 8.1 per cent in the second quarter of the current fiscal year and in the range of 9.3-9.6 per cent during 2021-22 (FY22), according to an SBI research report.

In the first quarter of FY22, the economy grew 20.1 per cent. For the FY22, the RBI has estimated real GDP growth to be at 9.5 per cent — 7.9 per cent in Q2, 6.8 per cent in Q3, and 6.1 per cent in Q4.

“According to SBI’s Nowcasting Model, the forecasted GDP growth for Q2FY22 would be 8.1 per cent, with an upward bias. The full-year (FY22) GDP growth is now revised upwards to 9.3-9.6 per cent, from our earlier estimate of 8.5-9 per cent,” the research report, Ecowrap, said.

The projected 8.1 per cent growth rate in Q2FY22 is the highest growth across all economies, it said. The average GDP growth of 28 selected economies has decelerated to 4.5 per cent in Q3 (2021), against 12.1 per cent. Also at an annual rate of 9.3-9.6 per cent, the country’s real GDP growth would now be 1.5-1.7 per cent higher than the pre-pandemic level of FY20.

On November 19, Prime Minister Narendra Modi announced the government would repeal the three farm laws. He also said a committee would be set up to decide on matters, including promotion of zero-budget farming, scientifically changing the crop pattern, keeping in mind the changing requirements of the country and make MSP more effective and transparent.

The report also said five agricultural reforms could act as enablers, even without these Bills.

“First, instead of MSP as a price guarantee that farmers are demanding, the government could insert a quantity guarantee clause for a minimum period of five years that procurement to production percentage of crops (being currently procured) should at least be equal to last year percentage,” the report said.