Are they expecting or just praying?

After four quarters of consecutive growth, the Indian economy will grow robustly at 9.5% or more in 2021-22, opined Chandrajit Banerjee, Director General, Confederation of Indian Industry. Reasons are "the continuing export boom, surge in tax revenues (notably of GST), improvement in manufacturing growth (as indicated by the purchasing managers' index), shrinking pile of bad debts with banks, booming corporate profits, sustained growth in the country's tally of unicorns and impressive inflows of foreign investment." Economic growth may have returned but unemployment is the biggest worry, wrote Udit Misra. Compared to August 2016, the number of employed people is lower by 14 million in August 2021, labor force participation (LFPR) for women is abysmally low, inflation is running consistently higher, and poverty and inequality have increased. "We are counting on better-balanced growth in India's gross domestic product (GDP), led by a combination of demand recovery owing to high vaccination rate, normal mobility, and sectoral output broadly back at pre-pandemic levels," wrote Radhika Rao. "We project 2022-23 growth to stay firm at 7% year-on-year, after an estimated 9.5% in 2021-22, which is among the fastest in our Asia-10 universe." "Reserve Bank of India (RBI) Governor Shaktikanta Das...said the country's economy has recovered stronger than expected from the initial impact of the Covid-19 pandemic, but there is need to be watchful of demand sustainability after the end of festivities," HT. From a high of 15.27 units from April-November 2018, two-wheeler sales have dropped by 40% in 3 years to 9.11 million units, wrote Vivek Kaul. Purchase of a two-wheeler is usually the first sign of increasing prosperity. "More recently, there have been news of people down-trading their purchases by buying smaller packs or substitutes of products." If the RBI continues to tolerate high inflation the rupee will weaken. "A weaker rupee will feed into inflation further, given that India is a net importer of goods." "India's startup ecosystem has notched up record investment of nearly $36 billion in privately held companies this year as demand for digitisation grew manifold amid the Covid-19 pandemic," ET. "Indian companies have mopped up more than Rs 9 trillion through debt and equity routes in 2021 to meet their renewed thirst for business expansion in a buoyant stock market brimming with liquidity and helped by recovering macroeconomic indicators after pandemic ravaged first few months," BS. Of this Rs 5.53 trillion was raised through debt and Rs 1.06 trillion from overseas. We do not know if the new debt is to be utilised for new projects or to pay off previous debt at higher interest rates, a process known as 'restructuring', Cleartax. With the Federal Funds Rate at near 0% in the US, TE, and with negative interest rates in Europe and Japan, Reuters, it seems logical to borrow in foreign currencies. The danger is the rupee. The exchange rate of the rupee was at 61 to the US dollar in 2014-15, wikipedia. Today one dollar buys Rs 74.7, Xe. If the rupee drops significantly it will become more expensive, and hence difficult, to service borrowings in foreign currencies. The pundits are predicting happier times. Should we expect, hope or pray?