Economic activity in India is on the ‘verge of normality’ after being severely hit by the pandemic, according to Japanese brokerage Nomura which recently said the country’s gross domestic product (GDP) will grow at 13.5 per cent in fiscal 2021-22. Nomura’s estimates are higher than the growth rate pegged by the Reserve Bank of India (RBI). RBI expects GDP to jump by 10.5 per cent in 2021-22, after contracting by 7.7 per cent in 2020-21.
The Nomura India Business Resumption Index (NIBRI) picked up to 98.1 (provisionally) for the week ending February 14, from 95.9 in the preceding week, Nomura said. The brokerage said that it expects real GDP to contract by 6.7 per cent in 2020-21 and grow by 13.5 per cent in fiscal 2021-22, according to a report.
Power demand fell by 0.1 per cent week-on-week but the brokerage said that this may be likely due to a payback from the stellar 9.6 per cent rise during the preceding week. It said that labour participation rate inched down to 40.5 per cent from 40.9 per cent in the week before. The brokerage said its proprietary index has been on an uptrend since hitting its trough during the strict lockdown in April last year.
The continued recovery in the index is strongly predicated on containment of the pandemic, the brokerage said, adding it is upbeat on growth prospects due to the confluence of fiscal activism, the lagged effects of easy financial conditions, base effects and faster global growth.