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Key sectors look to add capacity, fuel hopes for a robust recovery

NEW DELHI: Most Covid-battered economies are growing again. Even with a third wave of infections surging around the world, most economies including India’s are expected to report robust growth for 2021-22.
SBI recently quoted government data to estimate that the nominal GDP (calculated at current prices, without adjusting for inflation) will grow at 17.6 per cent in 2021-22, a rate second only to the one clocked in 2010-11. This would take the overall GDP to 1 per cent above the pre-pandemic level in 2019-20.
But what is fuelling hopes of a more sustained recovery in the months and years beyond March 2022 is an in-house survey by India’s biggest lender. It shows that all sectors of industry, the segment that accounts for a quarter of India’s economic output, are borrowing again, a trend that picked up from September 2021. Some large sectors plan to add capacity too, indicating expectation of future growth.

The SBI survey, released Wednesday, shows that the credit growth witnessed in September-November 2021 is matched by plans for capacity expansion in large sectors.
More than two-thirds of the survey’s respondents – comprising textile, food processing, chemical, and power companies – reported optimism in the business environment and favoured capacity addition in the next two-three years. This level of optimism has not been seen during the pandemic.
New investments, new jobs
Gujarat, Maharashtra and Tamil Nadu, three of the most industrialised states in India, accounted for more than 40 per cent of all new investments announced in April-December 2021. Overall, new investments in 2021-22 are expected to grow 50 per cent over the previous year.

This is led by private companies, which accounted for 70 per cent of the new projects, up from around 50 per cent a year ago.

The top three sectors to announce new projects in the last nine months – roads, community services, and real estate – accounted for a third of the total and are all major employers. Another reason for hope.

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