New Delhi: Ratings agency ICRA on Monday revised up its 2021-22 real GDP growth estimate for India to 9 per cent from the earlier 8.5 per cent. A ramp-up in COVID-19 vaccination, healthy advance estimates of kharif (summer) crop and faster government spending were the factors that led to the revision, the agency said in a statement.

It can be noted that after the 7.3 per cent contraction in 2020-21, there were expectations of a higher growth number in 2021-22. However, the second wave of COVID-19 infections early into the fiscal year, which spread even in the hinterland, made analysts more circumspect. The RBI expects the economy to grow at 9.5 per cent. Icra on Monday said it expects the second half of the fiscal year to have brighter prospects.

"The widening coverage of COVID-19 vaccines is likely to boost confidence, which will in turn reenergise demand for contact-intensive services, helping to revive the portions of the economy affected most by the pandemic," its chief economist Aditi Nayar said. The robust kharif harvest is likely to sustain the consumption demand from the farm sector while the expected acceleration in the central government spending after the withdrawal of the earlier cash management guidelines will recharge this key driver of aggregate demand, she added. The key risk to its revised projection of 9 per cent GDP growth is a potential third wave and the existing vaccines being ineffective against newer mutations of the virus, she said.

Reserve Bank slaps Rs 2 cr penalty on RBL Bank

Govt’s 7 member Panel set up to rationalise GST rates

India needs 4-5 "SBI size" banks to meet the growing needs of economy Finance Minister