The Indian economy is expected to grow at 9.2 per cent in FY22, recovering from a historic contraction of 7.3 per cent in the preceding year, the statistics office said on Friday. At Rs 147.5 trillion, nominal GDP in FY22 is also set to surpass the pre-pandemic GDP level of Rs 145.7 trillion in FY20.

       With the economy growing at 13.7 per cent in the first half (April-September) of FY22, released on November 30, the first advance estimates of GDP incorporate factory output data of one additional month (October) and data from some lead indicators till November and December. With the government shifting the date of presentation of the Union Budget to February 1 from last day of February starting with FY18 Budget, the statistics department also advanced the release of the first advance estimates so that the government has an annual estimate of GDP to be incorporated in Budget calculations even at the cost of lower accuracy.

       According to the statistics office, agriculture is expected to grow at 3.9 per cent in FY22 while manufacturing is likely to expand at 12.5 per cent and trade, hotel sector is expected to grow at 11.9 per cent. GVA at basic prices is likely to grow at 8.6 per cent in FY22 after contracting 6.2 per cent in FY21.

       The Omicron spread is expected to adversely impact the contact-sensitive services sector more than the manufacturing sector which could have reduce growth momentum in the March quarter. During the second wave of the pandemic earlier this year, while manufacturing mostly held up, services contracted in May, June, and July, according to the PMI data. During the first wave of the pandemic in 2020, a contraction in the services sector was sharper than in manufacturing and took seven months to return to expansion territory.

       The World Bank and Moody’s have projected the Indian economy to grow at 8.3 per cent and 9.3 per cent, respectively. ICRA last week retained its 9 per cent growth forecast for FY22. The Reserve Bank of India (RBI) has retained its projection of 9.5 per cent annual GDP growth in FY22 although it has revised downwards its December-quarter growth estimate to 6.6 per cent from 6.8 per cent, and the March-quarter growth estimate to 6 per cent from 6.1 per cent.