New Delhi: India’s economy in the current financial year is expected to achieve marginally higher growth of 7.5% as against the earlier forecast of 7.3%, on account of improved performance of the infrastructure sector, which includes construction, cement and steel industries, said SBI Research in a report.
As per the data released by India’s National Statistical Organisation (NSO) on Tuesday, the country’s GDP registered a growth of 8.7% in the last financial year as economic growth as measured by the Gross Domestic Product was Rs 147 lakh crore. It means India added a Gross Domestic Product of additional Rs 11.8 lakh crore in the financial year 2021-22 as against the GDP during the FY 2020-21, the first Covid-19 pandemic year.
Read: SBI’s net profit for FY22 jumps by 55% to over Rs 31,500 crore
Soumya Kanti Ghosh, Group Chief Economic Adviser at India’s largest bank, State Bank of India, says due to the high inflation and the subsequent upcoming rate hikes the real GDP will incrementally increase by Rs 11.1 lakh crore in the current financial year. “This still translates into a real GDP growth at 7.5% for FY23,” Ghosh said in a statement sent to ETV Bharat. As per the official data, the nominal GDP that is not adjusted for inflation, expanded by Rs 38.6 lakh crore to Rs 237 lakh crore, showing a massive year-on-year growth of 19.5%. According to the calculation by SBI Research, nominal GDP will grow by 16.1% to Rs 275 lakh crore, primarily due to high inflation as nominal GDP is not adjusted for changes in the price rise.
Improved corporate results
The corporate sector showed a strong rebound in the last financial year as the economy recovered from the adverse impact of Covid-19 related lockdowns and restrictions. For example, in the last financial year, nearly 2,000 Corporates, which are listed on stock exchanges, reported 29% growth in the top line and 52% growth in profit after tax (PAT) as compared to the previous year.
Moreover, the infrastructure sector, which includes real estate, cement and steel reported impressive growth numbers in both revenues as well as profit after tax. For instance, both the construction and steel sectors reported growth of 45% and 53% respectively in revenue in the last financial year as compared to FY 2020-21.
Strong order book position
Order book position of infrastructure and construction sector companies remained strong. Construction major L&T reported 9% growth in order book position at Rs 3.6 lakh crore as of March this year, a 10% growth in order book position in FY 2021-22 when it was Rs 1.9 lakh crore as compared to order book during FY 2020-21 when it was Rs 1.7 lakh crore.
