IGI Logo

Below is perspective on Advance estimates of GDP for FY22 By Dr. M Govinda Rao, Chief Economic Adviser at Brickwork Ratings

The advance estimate of GDP for FY22 released by the Ministry of Statistics and Programme Implementation (MOSPI) are more optimistic at 9.2%, considering the supply bottlenecks, coal, power and semiconductor shortages and looming third wave of the pandemic.

The advance estimates are the extrapolation of the numbers based on the six to eight months of the current fiscal.

The estimates serve as an essential input to the upcoming Budget exercise for the next fiscal. An increase in the nominal GDP at 17.6% provides additional expenditure space for the government. As per the nominal GDP estimates, the budgeted fiscal deficit for FY22 works out to be 6.5% of the GDP. Despite the shortfall in disinvestment proceeds and additional demand for supplementary grants, the fiscal deficit target of 6.8% of GDP is likely to be achieved in FY22.  The 17.6% increase in nominal GDP also results in a substantial decline in the debt to GDP ratio, which is the focus of FRBM.

Above views are of the author and not of the website kindly read disclaimer