The country’s gross domestic product (GDP) is likely to grow at 5.8 per cent in the third quarter of fiscal 2022, according to an SBI’s research report- Ecowrap.

As per SBI Nowcasting Model, the forecasted GDP growth for Q3 FY22 would be 5.8 per cent, with a downward bias.

The report said the recovery in domestic economic activity is yet to be broad-based, as private consumption remained below pre-pandemic levels.

Investment activity though, is displaying a traction in pick up, with merchandise exports remaining buoyant, it said.

The report suggested that the government can offer livelihood loans, say up to Rs 50,000 to rural poor.

This loan may be given on the premise that interest-servicing alone will keep the loan standard with subsequent loan renewal linked to successful repayment record, it said.

“If the government were to bear, say, 3 per cent interest subsidy, on a portfolio of Rs 50,000 crore, the outlay would be only Rs 1,500 crore during 2022-23.

“And these loans will also act as a big consumption booster at subsistent levels,” it said.

The additional advantage of these micro livelihood loans is that they will help the banking system prepare a comprehensive database and credit history of marginal borrowers that can be further leveraged to create new credit-worthy borrowing classes, the report said.