The growth rate of 11 percent for FY21-22 seems to be good but it is very low compared to other emerging economies. The growth rate is measured year on year based on real prices. So, the contraction of GDP in the 20-21 makes the growth rate look bigger than it actually is. Actually, considering the average growth in GDP for the 2 years 20-22, the average growth rate will come out be approx 2.5 percent which is quite low compared to other economies like China.
The stock market going up like anything maybe just a sentimental overzealous reaction. Also, I think the talk of V shaped recovery in the ES is slightly premature since the growth levels need to be maintained at higher levels for some time before concluding such a recovery pattern. Without job creation and increased income levels, it is difficult to create demand in the economy and without a sustained demand long term growth seems a far fetched idea.
Though the increased capital expenditure seems a good idea, but the implementation aspect still remains a challenge due to long delays in the projects. In this budget, the government has gone for a countercyclical policy approach which is welcome if the implementation issues are addressed as well.
