14 MAR,2021 | MEDC
The Organization for Economic Cooperation and Development (OECD) has raised its projection for India’s economic growth rate by 4.7 percentage points at 12.6% for 2021-22. That would enable India to retain its pre-pandemic tag of the fastest growing major economy in the world. However, that estimate – in real terms – needs to be taken with a pinch of salt as the economic rebound in 2021-22 would largely be a statistical illusion due to a low-base effect. Anyway, something is better than nothing, and the OECD believes that the contraction of our economy would not be as steep as expected. That itself is enough to fuel the feel-good factor and lead to a self-fulfilling prophecy. Nevertheless, inflation will continue to remain a key factor impacting the growth process. While the first half of the next fiscal year would benefit optically due to a low-base effect, the second half is likely to see a more broad-based upturn in economic activity across various sectors due to the strengthening of various fundamentals.
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