New Delhi: Senior Congress leader P Chidambaram on Wednesday said the country's growth rate is weakening and there is no sign of the promised "recovery".
He said this after the country reported an overall GDP growth of 8.7% for the year 2021-22, with the last quarter showing a growth rate of 4.1%.
"The NSO figures are out: the most striking graph is the quarterly growth rates in 2021-22 of 20.1, 8.4, 5.4 and 4.1% =.
"That graph tells all. The growth rate is weakening with every quarter and there is no sign of the promised 'recovery'," Chidambaram said on Twitter.
The former finance minister said the GDP in 2021-22 is barely above the level achieved in 2019-20.
"That means that after you two years, India's economy is at about the same level as it was on 31-3-2020," he added. PTI SKC
India's Per Capita Income Below Pre-COVID Level
India's annual per capita income at constant prices remained below the pre-COVID level at Rs 91,481 in 2021-22, official data showed on Tuesday.
However, the per capita income based on Net National Income (NNI) at constant price grew by 7.5% in FY22 over the previous year.
The per capita income at constant price was Rs 94,270 in 2019-20 before it dipped to Rs 85,110 in 2020-21 on account of the disruption in economic activities caused by COVID-19 pandemic and subsequent lockdowns.
At current prices, the per capita income rose by 18.3% to Rs 1.5 lakh during in 2021-22 fiscal.
The per capita income at current prices had dipped to Rs 1.27 lakh in 2020-21 from Rs 1.32 lakh in 2019-20.
The per-capita income is a crude indicator of the prosperity of a country.
GDP Slowdown in Q4 Blamed on Pandemic Impact
The slowdown seen in India's GDP growth to a four-quarter low of 4.1% in January-March period of 2021-22 was mainly on account of impact of the third COVID wave and high commodity prices, said some experts.
Indian economy grew at its slowest pace in a year during January-March, pulling down the Gross Domestic Product (GDP) growth in the full year to March to 8.7% before Russia's invasion of Ukraine added a new inflation hurdle to the recovery.
The GDP expanded by 4.1% in the final quarter of the 2021-22 fiscal year, according to data released by the National Statistical Office.
This was lower than the 4.8% growth the Chinese economy saw in the quarter.
Aditi Nayar, chief economist, ICRA, said the slowdown was inevitable, stemming from the adverse impact of the third wave on contact services, and of high commodity prices on margins, as well as the unfavourable base effect.
"Unsurprisingly, the services sector was the main driver of the 3.9% GVA growth in fourth quarter of FY2022," she said.
Boosted by government spending, Public Administration, Defence and Other Services (PADOS) stood out as the fastest growing sub-sector of GVA (Gross Value Added) in January-March quarter of last fiscal, Nayar added.
Rumki Majumdar, economist, Deloitte India, said, the difference between the real and nominal GDP suggests that inflation has been a persistent problem, and the economy has been fighting the challenge of rising prices for a long time now.
According to some experts, the outlook for the current fiscal year remains clouded as global crude oil prices have hardened back to $120 per barrel after increased sanctions on Russian oil.
Momentum in the services sector will be one of the key drivers apart from the government's focus on enhancing public capital expenditure.
High inflation had led to the Reserve Bank raising the benchmark interest rate by 40 basis points in an unscheduled review. It is expected to take similar measures when the Monetary Policy Committee meets for the bimonthly review on June 8.
Government's chief economic adviser Nageswaran ruled out the risk of stagflation in India as the country is better placed than other nations.
Stagflationary risk to India is quite low compared to other countries, he said.