The latest provisional estimates released by the National Statistical Office yesterday peg India’s real gross domestic product (GDP) growth at 8.7% last fiscal, a tad slower than 8.9% according to the second advance estimate released in February 2022. In absolute terms, real GDP for fiscal 2022 is now estimated at Rs 147.35 lakh crore, marginally less than Rs 147.72 lakh crore estimated earlier. The downward revision reflects a minor correction in the first to third quarter (Q1-Q3) GDP numbers, and a mild impact of the third Covid-19 wave and the Russia-Ukraine war in the fourth quarter (Q4)
It is important to bear in mind that, given the large output loss due to the pandemic, GDP is only 1.5% above the pre-pandemic (fiscal 2020) level
Gross value added – the supply-side and firmer measure of the economy – rose 8.1% in fiscal 2022 (down from previous estimate of 8.3%), compared with a 4.8% contraction in fiscal 2021
While the provisional estimates show a mild reduction in the overall size of the GDP, estimates of private final consumption expenditure (PFCE) and gross fixed capital formation (GFCF) – the biggest two demand-side drivers – were marginally notched up. The latter suggests the government’s continued focus on capital expenditure (capex). PFCE at Rs 83.8 lakh crore in fiscal 2022, however, is still just 1.4% (compared with 1.2% earlier) above the fiscal 2020 level and was the slowest to recover. Moreover, it faces strong headwinds from rising inflation
