INADEQUATE REVIVAL.

 According to National Statistical Office(NSO )estimates the Gross Domestic Product (GDP) of  India at constant prices (2011-12) increased to 13.5% in the April-June quarter of 2022 compared to the same period last year as against Reserve Bank of India's projected growth of  16.2 %, mainly due to revival of consumption, recovery of the service sector and the low base of last year. While Gross Value Added (GVA) at base prices grew at 12.7%" in the same quarter nominal GDP was up at 26.7% largely echoing the inflationary pressures in the economy.Keeping the two pandemic years of 2020 and 2021 out, Q1 real GDP growth in 2022-23 is only 3.8 % higher than in the equivalent quarter of 2019-20 .It is to be noted that output in the eight broad sectors that constituted GVA expanded with public administration, other services and defence growing 26.3%. Service sectors like electricity, gas, water and other utility services increased from 13.8% to 14.7% growth in Q1 2022-23. Financial,real estate and professional services witnessed very high growth from 2.3 % to 9.2%.Unfortunaely compared to last years construction witnessed sharp decline  from 71.3% to 16.8%.Similarly manufacturing growth declined from 49.0% to 4.8% in the same period.  Likewise contact intensive trade,hotels, and transport services suffered decline from 34.3% to 25.7 % in Q1 of 2021 -22  and 2022-23 .respectively. While agriculture,  forestry and fishing improved  from 2.2% to 4.5% mining and quarrying dipped from 18.0% to 6.5% in Q1 of 2022-23. Significantly even though the service sector lifted up growth during the first Quarter of 2022-23,performance in  trade,  hotels and transport segments though improved were well below the pre pandemic levels.The decline in manufacturing can be attributed to the higher input costs and supply disruptions. 

On the expenditure side NSO  estimate showed that at constant prices (2011-12) growth in private final consumption expenditure(PFCE)or simply private spending grew at very high level of  25.9% and it's share in real GDP stood at 59.9% in the june quarter, the highest for the first quarter in a decade..Private consumption demand is improving primarily because urban demand is getting support from contact intensive services,.But high inflation results in subdued rural demand due to negative rural wage growth. Government Final Consumption Expenditure (GFCE) which  contributed 12.6% in the previous year marginally declined  to 11.2% in Q1 2022-23.  On the other hand the share of exports was highest for this Quarter since 2015. While exports registered remarkable growth in Q1 ,imports rose at a scorching pace, resulting in trade deficit  at record level impinging our external sector. The share of exports in GDP ( in real terms) increased to 22.9% in June quarter from 22.7% a year ago. Quite significantly the share of imports spiked from 22.7% last year to 27.8% in this quarter.Further as per latest August data exports growth which was 33.38 in 2021 maintianed 33% in August 2022 as against import spiking from  45.09 to 61.68% and trade deficit  widening from $ 11.71 billion to$28.68  in the same period. Gross Fixed Capital Formation (GFCF) as a percentage of real GDP stood at 34.7% from 32.8% last year the highest for the first quarter of any fiscal year in the past ten years According to Finance Secretary "This was supported by various reforms and measures taken by the Government leading to the reinvigoration of the Capex cycle and crowding - in  of private investment."Government spending during this quarter grew only 1.3% indicating that both Centre and states governments kept their expenditure in check during this period. On the expenditure side the revival in private consumption shows the demand is picking up largely due to higher purchasing power and increasing propensity among urban population as reflected in high frequency data on consumer goods production, passenger vehicles sales and air travel. The rise in Gross Fixed Capital Formation continued to play a lead part in driving growth 

As a matter of fact an enquiry into the  percapita income estimates for financial year 2022  by NSO for 21 states and Union territories which do not capture Maharashtra and Gujarat indicated continuing deterioration in average standard of living in several states in relation to the  pre pandemic financial year of 2020.Real percapita income of Uttar Pradesh, Kerala, Meghalaya, Uttarakhand, Jharkand, Punjab and the UT of Puducherry saw further decline in percapita capita income from national average of - 2.9% in financial year 2022.The income squeeze in the agrarian state Punjab suggest that their livelihood is impacted by both debt and elevated input costs. In Kerala it is probably due to the rapid decline in tourism and foreign remittances which accounted for more than one fourth of Net State Domestic Product. In UP due to lock down and consequent return of migrant workers re to native villages created much distress .However in as many as 14 states real percapita income has exceeded the pre pandemic levels. 

With rising interest rates,inflationary pressures, an uneven monsoon and slowing global demand due to geo political conflicts,  analysts feel that India's  annual economic growth target of 7.2 % for FY 2023 as projected by Reserve Bank of India may not be achieved. According to RBI Governor while exports have an important role to play in growth, imports could affect inflation. On the domestic front agriculture sector is doing well and monsoon rainfall is good. "Our focus will be to minimize growth sacrifice. Under the present circumstances global factors will be responsible to a greater extent in the context of both inflation and growth Despite recent depletion of FER, RBI Governor observed that"India's strong foreign exchange reserves are a solid backbone for the domestic economy and reserves provide  comfort to markets and foreign investors".

  In short emerging signals both global and domestic from available data are mixed and largely uncertain.Positively urban consumption is  gathering momentum whereas rural demand is yet to pick up.Decline in manufacturing,construction and mining and quarrying not only adversely affect job creation but also the growth momentum.  Inflationary pressures particularly imported inflation still persist.Attainment of targeted growth rate of 7.2% largely depends on inflationary conditions, picking up of rural demand and geo political and global factors. Hence the economic revival is largely inadequate as per our capabilities.