Fresh Factors That Could Disrupt India’s Economic Recovery in FY2022

The surge in Covid-19 cases is one of the factors that have disrupted India’s economic recovery. In addition to this, certain fresh hurdles could again hurt the Indian economy even after the country is staged a better recovery in terms of Covid-19.

Source: ORF

Several experts have estimated that India’s economy is likely to register around 10 per cent GDP growth in 2022, but some new challenges could affect the growth. For example, high fuel and energy prices are one of the factors. Additionally, several other factors could threat India’s economic growth.

Also Read: India’s December Inflation Rate Worsen Against Government’s Predictions

Factors That Could Pose Threats to India’s Economic

As is discussed above that apart from high energy and fuel prices, certain other factors can affect the level of India’ economic growth in the Fiscal Year 2022. Let’s have a look:

High Fuel Prices

Diesel, petrol, and LPG prices have increased several times in the last few months. Diesel and petrol prices have skyrocketed and affected millions of businesses. The chief policy advisor at EY India, Mr DK Srivastava, earlier told that if the fuel prices continue to grow, then it might show an adverse impact on growth, inflation, and trade balance.

Source: The Indian Express

Rising Inflation

Another most important factor in India’s economic revival is rising inflation. Several brokerage houses also say the same. In India, retail inflation is again rising after cooling down for the last few months. In February, retail inflation increased suddenly because of the rise in food and energy prices.

The Consumer Price Index (CPI), states that retail inflation has jumped to 5.03% in February. The rise in retail inflation indicates that the price of essential items like food and energy are on the rise. The price increase of these household items might impact the country’s growth.


Even though the country has almost recovered from the Covid-19 crisis, the unemployment levels are still far from normal. Mumbai-based think tank CMIE said that India’s unemployment rate has increased to 6.9 per cent in the month of February 2021. The data shows that the unemployment rate in urban areas weakened despite the rise in the employment rate.

Source: Medium

CMIE also stated that the consumer views among households remain less than pre-pandemic levels. They said that consumer sentiments are crucial as they reflect the intangible components of the household.

Fresh Covid Spike

Covid-19 cases have increased in India in the last few days. On Sunday, the country reported nearly 47, 000 fresh coronavirus cases and it is recorded as the highest daily spike in 2021. As per the experts, India might face a second wave of infections. Also, they fear that the rise in Covid-19 fresh cases will disrupt the growth of India’s economy, if lockdowns in Rajasthan, Mumbai, and Punjab continues.  

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Singh Vivek

With over 5 years of writing obituaries for a different organisation, I have a uniquely wry voice that shines through in my newest collection of articles.

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