Indian Economy – A Brief Overview

GDP Growth projection;

India has become the fifth largest economy in the world and second-fastest economy in the G20 for the financial year 2022-23.

The Growth of Real GDP or GDP at Constant Prices (2011-12) for the second quarter of 2022-23 is estimated at 6.3% as compared to 8.4% in 2021-22. Real GVA at Basic Prices is estimated showing a growth of 5.6% for the Second quarter.

The growth in nominal GDP for the second quarter of 2022-23 is estimated at 16.2%. Nominal GVA at Basic Prices is estimated showing a growth of 16.2% for the second quarter of 2022-23.

The Reserve Bank of India in its MPC statement revised its GDP projection to 6.8% for 2022-23 from their earlier projection of 7% and 6.3% for 2023-24.

Multilateral Agencies Projection

Multilateral agencies have projected a slow down for next financial year i.e. 2023-24 and revised the current year projected growth rate.

  • According to OECD report, the GDP growth may slow down to 5.7% in 2023-24. It projected India’s growth rate as 6.6% for 2022-23. According to OECD Report, Indian economy will not escape the global slowdown.  
  • According to World Bank report, the GDP growth may slow down to 6.6% in 2023-24. It projected India’s growth rate as 6.9% for 2022-23, an upward revision in its October report from its August report projection of 6.5%.
  • According to International Monetary Fund (IMF), the GDP growth will slow down to 6.1% in 2023-24. It projected India’s growth rate as 6.8% for 2022-23.

Growth Projection by Various Multilateral Agencies (in %)

Agencies

2022-23

2023-24

RBI

6.8

6.3

World Bank

6.9

6.6

IMF

6.8

6.1

OECD

6.6

5.7

ADB

7.0

7.2

Brief on Consumer Price Index (CPI)

On 12.12.2022, Central Statistics Office (CSO) has released Consumer Price Index (CPI). The highlights of the press release are as follows:

It is found that the Retail inflation has decreased from 6.77% in October, 2022 to 5.88% in November, 2022. The Consumer Food Price Inflation (CFPI) has also decreased from 7.01% in October, 2022 to 4.67% in November, 2022.

For the first time in 11 months CPI has come down. This is the lowest since December 2021. Now, inflation has come down below the upper limit of RBI’s Inflation Target.

Brief on the Index of Industrial Production (IIP)

On 12th December, 2022, data on Index of Industrial Production (IIP) for the Month of October, 2022 was released by Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation.

The major highlights of the data are as follows:

  • According to IIP data, with a base year of 2011-12, factory output in October, 2022, has decreased to -4.0% as compared to the level of 4.2% in the month of October, 2021.
  • The growth of Mining (2.5%), Manufacturing (-5.6%) and Electricity (1.2%) sector.
  • According to Use-based classification, the growth rates in October, 2022, over October, 2021, are 2.0% in Primary goods,
    -2.3% in Capital goods, -2.8% in Intermediate goods, 1.0% in Infrastructure/ Construction Goods, -15.3% Consumer durables and -13.4% in Consumer non-durables.
  • The Cumulative Growth for the period of April–October, 2022-23 is 5.3%.