The recent surge in Covid-19 infections, the central bank says, adds uncertainty to the outlook on domestic growth as restrictions could dampen demand improvement and delay the return of normalcy.
Aided by strong demand recovery, credit ratio rebounds to 1.33 in H2FY21, from 0.54 in H1FY21. GDP could grow at 11% in FY22, but the resurgence in Covid-19 cases is a key downside risk, says CRISIL.
According to a BofA Securities report, the Covid-19 shock could delay India touching the GDP of Japan by three years. In their latest estimates, it will now happen by 2031 if the economy grows at 9%.
While Indian banks' improved financial metrics do not fully reflect the impact of the Covid-19 pandemic, the under–capitalised PSBs are likely to remain risk averse and lose market share.
The veteran of the investment industry argues that this decade will witness an export-led growth. And while IT and pharma would rule the economy, other smaller industries, too, will jostle to rise up.
Rising inflation and firming bond yields in the U.S. push down Indian benchmark indices, causing a correction of around 6% from the latest life–highs of February 16.
As expected, the economy staged a turnaround in the third quarter of FY21 with a GDP growth figure of 0.4%. The stage is now set for a big rebound in FY22.
Despite the Survey’s positive tone, the Sensex and Nifty 50 closed in the red, falling nearly 8% in a matter of five trading sessions from their January 21 life–high.
