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 Budget is one of the most awaited events and this year’s Budget certainly did not disappoint. With a series of bold, reformist measures, it signalled a clear shift to growth orientation.
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.
While there is an expansion in fiscal deficit in the near term, the Budget does well to outline a path to fiscal consolidation once normalcy in economic activity is restored.
Finance Minister Nirmala Sitharaman’s Budget has given sufficient impetus to crucial sectors such as healthcare and infrastructure, and some opportunities to future-proof India’s growth story.
