Pent-up Demand, Higher Infra Investment Drive Growth In Apr-Sep; Economy grew 9.7% in first half: Finance Ministry

According to a Finance Ministry report, the Indian economy registered a broad-based expansion of 9.7 per cent during April-September 2022, supported by strong domestic demand and upbeat investment activity. It said the growth was driven by strong construction activity fueled by pent-up demand from the services sector, a rise in agricultural exports and increased investment in infrastructure.

“Private consumption, driven by pent-up demand, rose to its highest level in all second quarters during the last 11 years at 58.4 per cent of GDP. In his monthly economic review for November 2022, the finance minister said the investment rate has also become the highest among all second quarters since 2012-13 at 34.6 per cent of GDP.

It also added that momentum remains good as we move into the third quarter. There is cautious optimism as the slowdown in global economic activity is not reflected in India’s performance across various high frequency indicators.

“Overall increase in rabi coverage with irrigation reservoirs adequately filled for increased agricultural production in 2022-23. The increase in minimum support prices for both kharif and rabi crops in 2022-23 and progress in procurement of rice have already supplemented rural incomes, the report said.

It said that sales of passenger vehicles, two-wheelers and three-wheelers and tractors grew by a good margin year-on-year in October-November due to higher earnings among others. During the third quarter (up to November) of FY 2022-23, as projected by PMI Manufacturing, industrial activity remained in the expansion zone on improving operating conditions, expansion in new export orders and increase in production. Faster GST collection, robust e-way bill generation and increased e-toll collection confirm the resilience of economic activity.

On inflation, the report said inflationary pressures are easing with retail and wholesale inflation falling to 11- and 21-month lows, respectively, in November. WPI inflation continues to decline, and CPI inflation has slipped below the RBI’s upper tolerance limit of 6 per cent, driven mainly by a decline in food inflation.

It added, “Core inflation, however, remained stable and remained elevated at 6 per cent in November 2022, partly reflecting the increasing pass-through of higher manufacturing costs to consumer prices as demand accelerated.” Getting well.”

The Indian external sector continues to face headwinds arising out of the global recession. However, the downside of the rising current account deficit is expected to be limited by a strong services export performance during the rest of the year and inward remittances, which are expected to reach $100 billion as of this fiscal. world Banks, said the Finance Minister.

“As we move into 2023, the outlook for global economic growth is expected to become more complex, and therefore continued vigilance is an important aspect in maintaining India’s external resilience. No country can afford to sit on its laurels, India Involved. A continued commitment to macroeconomic stability will strengthen both economic performance and investor interest in India. The latter is currently very much. It needs to be nurtured,” the report said.

It said that as the pandemic recedes more and more into the background, India needs to shift its focus towards medium-term challenges, such as securing the technology and resources for the energy transition and building a 21st-century economy. To skill our youth for the economy. Fiscal consolidation at the general government level.

“The good news is that a lot of hard work has been done over the last several years and a strong platform has been created on which the superstructure of a middle-income economy can be built,” the report said.

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