India's Q3 GDP grows 5.4%; FY22 growth revised downwards

India's gross domestic product (GDP) in the third quarter of the ongoing financial year rose 5.4% year-on-year to ₹38.22 lakh crore, according to data released by the National Statistical Office (NSO).

For fiscal 2021-22, real GDP growth estimate was revised downwards to 8.9% compared with the earlier forecast of 9.2%, data compiled by the Ministry of Statistics and Programme Implementation showed. "Real GDP or gross domestic product at constant (2011-12) prices in the year 2021-22 is estimated to attain a level of ₹147.72 lakh crore, as against the first revised estimate of GDP for the year 2020-21 of ₹135.58 lakh crore," the statement said. Gross value added (GVA) growth for FY22 is now pegged at 8.3%.

The key reason for the downward revision in GDP growth is the upward revision of FY21 GDP in the first revised estimate of national income for FY21 released on January 31, 2022. FY21 GDP contraction was revised to negative 6.6% from negative 7.3%.

The October-December GDP data doesn't entirely capture the impact of the third wave of the Covid-19 pandemic which peaked in January 2022.

Nominal GDP or GDP at current prices in the year 2021-22 is estimated to attain a level of ₹236.44 lakh crore, as against ₹198.01 lakh crore in 2020-21, showing a growth rate of 19.4%, according to NSO.

This comes weeks after the Economic Survey 2021–22 pegged FY23 GDP growth in the range of 8%-8.5%.

Last week, ratings agency Moody's revised its economic growth projections for India during the calendar year 2022 to 9.5% from 7% back in November 2021. The upgrade in India's GDP growth prospects are underpinned by strong recovery momentum and focus on capital expenditure in the latest Union Budget, the agency said in its latest update of global macroeconomic outlook.

Meanwhile, production of eight core sectors rose by 3.7% in January 2022. The production of coal, natural gas, refinery products, steel, cement and electricity industries increased in January 2022 over the corresponding period of last year.

The index of eight core industries measures the output of eight infrastructure industries - coal, crude, natural gas, refinery products, fertilisers, cement, steel and electricity.

The central government's fiscal deficit at the end of January 2022 stood at 58.9% of the annual budget target for 2021-22, according to data released by the Controller General of Accounts (CGA).

The country's fiscal deficit -- the difference between total revenue and total expenditure of the government -- is projected to be higher at 6.9% this fiscal ending March 2022 as against 6.8% estimated earlier.