The global recession is skeptical for India as compared to other countries.
State Bank of India Chairman Dinesh Khara on Friday, expressed that, “The impact of the global recession is unlikely to be as prominent in India as in other countries, India is accomplishing satisfactorily with a projected growth rate of 6.8%”.
The Indian economy has fully recovered to the pre-pandemic real GDP level of 2019-20, according to the provisional estimates of GDP released on May 31, 2022. Real GDP growth in FY 2021-22 stands at 8.7%, which is 1.5% higher than the real GDP in FY 2019-20. These figures are associated with stronger growth momentum, suggesting increased economic demand.
The investment rate in the fourth quarter increased to its most heightened level in the previous nine quarters. Moreover, capacity utilization in the manufacturing sector rose in the fourth quarter, as against the third quarter, indicating a build-up in demand, which is compatible with the growth objectives of the Indian economy.
He said that the direct cause of inflation is not demand-led, but it is essentially supply-side inflation. “If we really look at the supply-side aspect of inflation, we’ve got a situation where capacity utilization is just about 71 percent. To that extent, there’s elbow room available for improving the capacity. So essentially, supply chain disruption, which has happened on account of the global headwinds, and… its impact on crude prices is one of the contributing,” he pointed out.
