Since independence, India’s per capita GDP has expanded eightfold in real terms. The country has advanced to a modern economy, with industry and services accounting for 75% of the Gross Value Added (GVA). India, which has become increasingly globally integrated, now exports one-fifth of its output, up from one-sixteenth when it gained independence. India also benefits from the demographic transition, with decreasing infant mortality and a continuous increase in literacy rates. As a result, with equal income distribution, higher employment levels, and globally equivalent social amenity provision, India’s per capita GDP might grow in the next 25 years as it has in the preceding 75.
Indian Economy in 2022 in the first half of the current fiscal year showed the government’s unwavering support for capital investment, which was 46.8% greater in FY 2022-23 (through August 2022) than in the previous year. As a result of the comeback in economic activity across all sectors, India’s overall employment situation has improved. The PLFS indicates that the urban unemployment rate is declining for the fourth quarter, ending in June 2022. Net payroll increases at EPFO increased by a factor of two in September 2022, indicating higher economic formalization. According to the job Index, hiring increased in most critical industries in October 2022. According to the Employment Outlook Report, recruiting activity increased in the September quarter, led by a rebound in new business gains, with India exhibiting the highest growth in the hiring intentions index.
Monthly Performance Evaluation in 2022
The following essential frequency indicators showed improved performance in 2022 for Indian Economy:
- In FY 2021-22, private consumption accounted for 57.5% of nominal GDP, indicating that it is becoming a macro growth driver.
- Production of rice, wheat, gramme, and maize will likely reach new highs. According to the second advance prediction of foodgrain production for FY22, overall foodgrain production is likely to reach a record high of 316.1 million tonnes, 2.85% higher than the target set, due to increased Kharif crop output and record rabi crop acreage.
- According to data issued by the Ministry of Statistics and Programme Implementation (MoSPI), retail inflation in India in October 2022 was 6.77% year on year (YoY).
- During April-September 2022, PMI Services stayed comfortably in the expansionary zone at 56.7.
- In June 2022, fuel usage was 18,269 (thousand MT), compared to 18,200 (thousand MT) in April 2022.
- The Industrial Index (Production IIP) was 133.5 in September 2022.
- The total index of eight core industries stood at 142.8 in FY23 (through September 2022), led by producing coal, refinery products, fertilizers, steel, electricity, and cement.
- In April-October 2022, major ports handled 446,503 thousand tonnes of cargo.
- In October 2022, railway freight traffic increased by 118.94 MT.
- Freight flow grew by 0.3% in March 2022, demonstrating that the increase in air freight and transportation activity has been maintained.
- In March 2022, 78.1 million e-way bills were issued, a 13% increase over February 2022.
- The government approved the participation of 61 companies in the PLI scheme for textiles in April 2022, with a proposed total investment of Rs. 9,077 crores (US$ 2.46 billion) and revenue of Rs.1.84 lakh crore (US$ 23.74 billion), resulting in the creation of approximately 2.4 lakh jobs.
- The gross Goods and Services Tax (GST) revenue collection in October 2022 was Rs. 151,718 crores (US$ 18.58 billion).
- The Indian crude oil basket reached US$ 116.06 per barrel in June 2022, up from US$ 109.51 in May 2022.
- UPI transactions were valued at Rs. 12.11 lakh crore (US$ 148.32 billion) in October 2022.
- In October 2022, merchandise exports totalled US$ 29.78 billion.
- Foreign Portfolio Investment (FPI) outflows totalled Rs. 28,497 crores (US$ 3.49 billion) in FY 2022-23 (through November 28, 2022).
- The liquidity adjustment facility’s (LAF) daily liquidity absorptions averaged Rs. 8.4 lakh crore(US$ 111.27 billion) in the second half of February through March 2022 (up to March 13), up from Rs. 7.4 lakh crore (US$ 98.02 billion) between the second and third weeks of January and the middle of February 2022.
- Reserve money amounted to Rs. 4,002,311 crores (US$ 523.6 billion) as of April 22, 2022.
- Currency in circulation (CIC) stood at Rs. 3,209,394 crores (US$ 419.86 billion) as of April 22, 2022.
- November 29, 2022, the rupee was worth Rs. 81.69 per US dollar.
- India received US$ 58.77 billion in foreign direct investment in the fiscal year 2021-22.
- India’s foreign exchange reserves amounted to $547,252 million as of November 18, 2022.
According to the RBI,
- As Of September 23, 2022, bank credit amounted to Rs. 126.30 trillion (US$ 1.55 trillion).
- As of September 23, 2022, credit to non-food businesses stood at Rs. 126.08 trillion (US$ 1.54 trillion).
Improved Performances Comparison
Because of the focus on macroeconomic stability in a globe where monetary tightening has reduced growth prospects, India is well-positioned to increase in the coming years. Second, as the private sector, both financial and non-financial, battled to restore balance sheets, capital formation suffered. The financial system stress of the second decade of the millennium is now behind us due to the loan boom observed in the first decade and beyond. The private sector’s financial and non-financial balance sheets remain strong, and there are early signs of a new capital formation cycle in the personal sector. Continuous central government capital spending promotes broad-based growth by encouraging private sector capital formation. As a result of the massive rise in spending, GST revenues have climbed significantly. A better economic recovery would allow collections to stabilize at a high level, reflecting broad-based consumption’s high revenue productivity. Due to a well-capitalized banking system, credit disbursement has increased in the retail, industrial, and service sectors. Because of unmet demand in the sector and strong Indian Economy in 2022 outlook, the service sector will continue to rise. Service sector firms are confident about demand conditions, sales turnover, employment intentions, and the overall business environment in the third quarter of the fiscal year 2022.
Electricity consumption, manufacturing PMI, exports, power supply, and other high-frequency indicators show that the economy has fully recovered from the COVID-19 pandemic shock. Economic growth is expected to be propelled by the effective execution of PLI schemes, the development of renewable energy sources, the diversification of import reliance on crude oil, and the strengthening of the banking sector. The rebound in the services sector continues apace while manufacturing strength remains constant. Private sector investments look to be in high demand. The central bank’s stress tests reveal that banks are financially sound and ready to lend. Monthly GST receipts are high, showing the strength of the Indian Economy in 2022. The successful implementation of the Production Linked Incentive Scheme, developing renewable energy sources while diversifying import dependency on crude oil, and strengthening the banking sector is expected to propel economic growth. Industrial metal prices have fallen to their lowest level in sixteen months, and prices for other food-related commodities have also fallen from their high. With the economic climate improving after the COVID-19 pandemic shock, the 2022 for Indian Economy has remained resilient and has positive development prospects in the future.
Net Revenue Growth in 2022
Between April 2000 and June 2022, Indian Economy in 2022 reached a total of US$ 604,996 million in FDI equity inflows. The central government’s financial performance has improved. The company tax increased by 91.6% year on year during the study period. Between April 2021 and October 2021, custom revenue collection climbed by 122.3% year on year, while IGST collection to the Centre increased by 40% yearly, mainly owing to the resumption of economic activity. Net direct tax revenues in FY 2021-22 (through March 16, 2022) were Rs. 13.63 trillion (US$ 175.83 billion), up from Rs. 9.18 trillion (US$ 118.42 billion) in FY 2020-21.
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“If this is realised, India is on track for a growth rate of around 7% in 2022-23,” the Reserve Bank of India stated in its State of the Economy report, which was released Friday as part of the November Bulletin. The GDP figures are due on November 30.
According to those polled by Bloomberg, the global economy will rise by 4.4 percent in 2022, following a 5.8 percent rebound in 2021. Most economists believe that growth will recover to its long-term average of roughly 3.5 percent beginning in 2023, as if COVID had never occurred.
“India can become a 5 trillion economy as envisaged by Prime Minister Narendra Modi not before 2028-29. In addition, you must regularly achieve yearly GDP growth of 9% over the next five years.
India is regarded as one of the world’s potential superpowers. This potential is ascribed to a number of indicators, the most important of which are its demographic trends, as well as a quickly rising economy and military.