Business Guide | Israel-India 2022

Overview of the Indian Economy The Indian economy has been showing sustained recovery steadily, despite the repeated waves of COVID-19 | Himanshu Srivastava I ndian Economy has been staging a resilient comeback against last twoyearsof global pandemic. Despite the repeated waves of COVID- 19 , disruptions in domestic and international supply-chain, the economy has been showing sustained recovery steadily. The advance estimates interpret growth in Gross Domestic Product (‘GDP’) of 9 . 2 per cent in 2021 - 22 (revised down to 8 . 8 per cent). Annual Real growth in demand side of GDP and its components (per cent) Components 2019 - 20 2020 - 21 2021 - 22 Recovery over Total Consumption 5 . 9 - 7 . 3 7 . 0 99 . 2 Gross Fixed Capital Formation 5 . 4 - 10 . 8 15 . 0 102 . 6 Exports - 3 . 3 - 4 . 7 16 . 5 111 . 1 Imports - 0 . 8 - 13 . 6 29 . 4 111 . 8 GDP 4 . 0 - 7 . 3 9 . 2 101 . 3 Source: National Statistical Organisation RE: Revised Estimate, PE: Provisional Estimate, AE: Advance Estimate Economic Stimulus In view of the global pandemic, an unprecedented one, theGovernment of India, immediately responded via an economic stimulus measure, of over Rs. 300 billion under the flagship scheme called ‘Aatma Nirbhar Bharat Abhiyaan’, (meaningSelf Reliant India Scheme). This was followed by policy reform and economic relaxation and initiatives through 5 tranches of duringMay 2020 , pertaining togovernment reforms, ease of doing business in India, ease in liquidity and policy reforms with spill over structural reforms. Balance of Payment (‘BOP’) According to the Economic Survey, throughout the pandemic, India’s BOP remained in surplus allowing the Reserve Bank of India (‘RBI’) to accumulate foreign exchange reserves of USD 634 billion (on 31 st December 2021 . Fiscal Deficit TheFiscal Deficit (‘FD’) increasedduring 2020 - 21 due to economic stimulus package. Since then the revenues on account of revenue receiptsandtaxeshavegoneupby 67 . 2 percent(YoY),asagainstan estimatedgrowthof 9 . 6 per cent inthe 2021 - 22 (BudgetEstimates). Comparison of Macroeconomic Indicators duringGlobal Global Financial Crisis Taper COVID- 19 Macroeconomic Indicators 2008 - 09 2012 - 13 2021 - 22 CPI inflation 9 . 1 9 . 4 5 . 2 Apr-Dec 2021 Gross FD % of GDP India 8 . 3 6 . 9 10 . 2 2021 - 22 (BE) FD of EMDEs (Asia) as % of GDP 1 . 6 1 . 7 7 . 8 2021 CA Balance as % of GDP - 2 . 3 - 4 . 8 - 0 . 2 Apr-Sept 2021 External Debt as % of GDP 20 . 7 22 . 4 20 . 2 June 2021 Forex Reserves (US$ billion) 252 292 634 31 Govt Bond Yields 10 -year 7 . 3 8 . 0 6 . 4 11 Total FDI inflows (US$ billion) 8 . 3 34 . 0 48 . 4 Apr-Oct 2021 SCBs CRAR Ratio (CRAR) 13 . 2 13 . 9 16 . 5 Sept 2021 SCBs Provision Coverage Ratio - 47 . 6 68 . 1 Sept 2021 Source: NSO, MoSPI, RBI, CGA, CDSL, Ministry of Finance, IMF. Israel-India > Business Guide > 2022 86 > More Information > The Indian Economy