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“The Q3 GDP growth rate at 5.4% is lower than estimates. Most components saw a dip, farm output at 2.6% despite a good monsoon year, mfg at 0.2%, construction at -2.8% despite activity picking up. As expected the FY22 growth projection has been revised downwards to 8.9%. Rising inflation, energy, and crude oil prices have had a major

impact on the growth rate.

The worrying part is high government spending failed to lift the growth rate. What is even more worrying is that the high crude prices, geo-political in the Jan-march quarter will likely put further pressure on the growth rate for full-year FY22. The high spending, Capex heavy budget announced by the government is likely to help with an upward curve in growth rate in FY23. A further spike in crude prices due to geopolitical tension remains a huge risk for India's growth rate going forward.”