India’s Top 500 Companies 2022

INDIA’S TOP 500 COMPANIES 2022 16 Indian Economy: The way ahead Global growth slowdown, spill over effects of global monetary policy tightening, uncertainty surrounding the end of Ukraine crisis and outbreaks of new coronavirus variants has significantly clouded India’s economic outlook. The prolonged geopolitical tensions along with resurgence in COVID-19 infections globally as well domestically will have more severe implications on investors’ sentiment, supply chains and global energy & commodity prices, posing substantial downside risk to India’s economic growth. In the current scenario, the government and the RBI are seen working in a coordinatedmanner toward balancing growth and inflation concerns. The introduction of Standing Deposit Facility (SDF) by the RBI and increase in cash reserve ratio (CRR) by 50 bps has enabled it to absorb excess liquidity from the market. The RBI also announced a 90 bps hike in policy repo rate to 4.90% during May and June as rapidly generalizing inflationary pressures could not be ignored further. Despite the RBI’s monetary policy actions and the duty cuts by the government, prices are expected to remain elevated in the near-term primarily due to supply-side woes and global commodity price dynamics. As regards the growth outlook, the robust government capex plan is expected to have a multiplier effect. With normalising economic activity, improved capacity utilisation and stronger corporate balance sheet, private investment activity is also expected to gain momentum. The growing vaccination coverage will sustain revival of contact-intensive services sectors. Thus, though the evolving geopolitical situation may cause short-term turbulence, the strong underlying fundamentals of the Indian economy will help it to be on the recovery path. Dun & Bradstreet