The State Bank of India (SBI) Research has revised India’s GDP (Gross Domestic Product) growth projection for FY22 to a range of 9.3 – 9.6 percent from the earlier estimation of 8.5-9.0 percent.
- The GDP growth in Q2 FY22 was estimated at 8.1 percent, which is the highest growth across all economies.
- India’s GDP had grown 20.1 percent in the Q1 FY22, compared to a 24.4 percent contraction in the Q1 FY20.
Key Points:
i.As per the SBI estimation, the real GDP will be around Rs 2.4 lakh crore more than the FY20 Real GDP of Rs 145.69 lakh crore. Q2 FY22 GVA (Gross Value Added) is estimated at 7.1 percent.
ii.India’s real GDP growth would now be 1.5 -1.7 percent higher than the pre-pandemic level of FY20.
iii.Based on the SBI Nowcasting model, the GDP growth projection was increased due to India recording only 11 percent increase in COVID -19 cases in Q3 2021, second lowest among top 15 most affected countries. The increase in cases declined to 2.3 percent in November 2021 over September 2021.
Agricultural Reforms:
i.On 19 November 2021, the Prime Minister (PM) Narendra Modi announced to repeal all the 3 agriculture laws and stated to complete the constitutional process in the upcoming winter session of Parliament.
- The PM has also announced to form a committee to decide, among others, making the system of MSP (Minimum support price) more effective and transparent.
ii.In the backdrop of that incident, SBI suggested 5 key agricultural reforms that could act as enablers even without these bills.
iii.First – Instead of MSP as a price guarantee that farmers are demanding, the Government was suggested to insert a quantity guarantee clause for a minimum period of 5 years
- This would make it mandatory for procurement to production percentage of crops (being currently procured) at least equal to last year’s percentage (with safeguards in exceptional events like droughts, floods etc).
iv.Second – To explore converting the MSP to Floor Price of Auction on the National Agriculture Market (eNAM).
v.Third – To strengthen APMC (Agricultural Produce Market Committee) market infrastructure.
- Based on a Government report, the monetary loss for cereals is around Rs 27,000 crore due to harvest and post-harvest losses. The losses for oilseeds and pulses are Rs 10,000 crore and Rs 5,000 crore, respectively.
vi.Fourth – To establish a contract farming institution in India which will have the exclusive right to oversee price discovery.
vii.Fifth – To ensure a symmetric procurement across states.
- Status of Current Asymmetric procurement – Top paddy producing states like West Bengal (First) and Uttar Pradesh (Second) witnessing very low procurement, even as states like Punjab and Haryana that are not largest producers witnessing much larger procurement.
About State Bank of India (SBI):
Establishment – 1 July, 1955
Headquarters – Mumbai, Maharashtra
Chairman – Dinesh Kumar Khara
