On the back of normalization of activity and growing confidence in the market with the rollout of COVID-19 vaccine, Moody's Investors Service, on Thursday, took higher India's growth projection for the next financial year beginning April 1, to 13.7 percent, from 10.8 percent estimated earlier.  For the current fiscal, the US-based rating agency expects the economy to contract 7 percent, lower than its previous estimate of 10.6 percent contraction.

Moody's Investors Service Associate MD (Sovereign Risk) Gene Fang said ''our current expectation is that in the current fiscal ending March 2021, the economy would contract 7 percent... We expect a rebound of 13.7 percent growth in the next fiscal on the normalization of activity and base effects.'' The very large rebound incorporates the view that recovery in activity will continue, with the rollout of vaccines and growing confidence in the market that activities are coming back to normal, Fang said in an online conference on India Credit Outlook 2021 organized by Moody's and its India affiliate ICRA.

ICRA Principal Economist Aditi Nayar said it expects 0.3 percent growth in the third quarter (October-December) of the current fiscal. ICRA expects the Indian economy to contract 7 percent in the current fiscal and growth to rebound to 10.5 percent in the next fiscal beginning April 1.

''Recession in India has ended,'' she said, adding there could be upside to growth in FY'22 if the government's capital expenditure increases, budget announcements are implemented and vaccination drives are carried out.

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