India on target for near 10% growth in 2021-22
India is set to hit its predicted GDP growth target of 9.5% for the financial year 2021-22, according to the chief of the Reserve Bank of India (RBI).
And official figures also show that retail inflation is falling as imports and exports are on the increase, all signs of recovery in the wake of the Covid-19 second wave that swept through the country earlier this year.
Governor Shaktikanta Das said the RBI was to put more emphasis on supporting growth because of the pandemic while making sure inflation stayed within the 2%–6% band set by the government.
The central bank will seek to gradually move towards achieving the 4% target over a period of time, he said, adding that the possibility of a sustained increase in inflation is unlikely.
Speaking at a symposium organised by The Indian Express and Financial Times, Das said that the improving availability of money in the global markets was fuelling a surge in markets domestically.
Regarding the problem of bad debt held by banks, he said there was scope for improvement in the functioning of the Insolvency and Bankruptcy Code (IBC), including legislative changes and shortening the time taken for cases to come before the bankruptcy courts.
However, one area of concern for the RBI Governor was the rise of cryptocurrencies. He said the RBI has “serious and major concerns” about cryptocurrencies which it has communicated to the government . He said: “We need credible answers on the contribution of private cryptocurrencies to the Indian economy going forward.
Meanwhile, India’s retail inflation figure fell to 5.3% in August 2021 from 5.6% in July, mainly due to food price inflation falling to 3.11% from nearly 4% in July and the effect of a high base last August.
This is the second consecutive month of marginal decline in the Consumer Price Index (CPI), keeping retail inflation below the central bank’s upper tolerance threshold of 6% after hitting 6.3% in May and June this year.
However, economists warned that inflationary risks persist, which could dampen consumers’ confidence. Inflation in health services is 7.8%; in transport and communication it is 10.2%; and in fuel and light it is almost 13%.
Exports up to $47.09 billion
According to Commerce Ministry data, India’s exports rose by 45.76% to $33.28 billion in August, compared with $22.83 billion in the same month last year.
Imports during the month increased by 51.72% to $47.09 billion, the data showed.
Trade deficit in August widened to $13.81 billion as against $8.2 billion in the same month last year.
Cumulative value of exports for the period April-August 2021 expanded by 67.33% to $164.10 billion, compared with $98.06 billion in the same period last year.
Imports during April-August 2021 stood at $219.63 billion, compared with $121.42 billion for the equivalent period in 2020.