Economy Of India

Introduction

economy The Indian economy has fully recovered to pre-pandemic real GDP levels of 2019-20, according to preliminary GDP estimates released on May 31, 2022. Real GDP growth in fiscal year 2021-22 is 8.7%, which is 1.5%. higher than real GDP in fiscal year 2019-20. These numbers are associated with stronger growth momentum, indicating higher economic demand.

The investment ratio rose in the fourth quarter to the highest level in the previous nine quarters. Furthermore, manufacturing capacity utilization increased in the fourth quarter from the third, implying a rebound in demand in line with the growth targets of the Indian economy.

Future government investments in the Indian economy are expected to be supported by factors such as tax increase.

, a simplified tax system, a thorough review and rationalization of the tariff structure, and digitization of tax returns.

In the medium term, an increase in investments in infrastructure and wealth creation projects should increase growth multiples. In addition, the revival of the monsoons and the planting of kharif helped the agricultural sector gain momentum. Since July 11, 2022, the southwest monsoon has blanketed the entire country, resulting in 7% higher than normal rainfall.

India has become the fastest growing major cheap in the world and is projected to become one of the world’s top three economies in the next 10-15 years, backed by its strong democracy and strong partnerships.

Priorities For Structural Reforms In 2021

Competition and Regulation: Elimination of legal barriers and bureaucracy to increase business dynamism

Labor Market: Review of strict labor protections in the formal sector to accelerate job creation

Health: increasing public spending to improve health outcomes equitably

Environmental policy: improving the state of the environment

Financial system: facilitate new settlement procedures

Recent Developments

India is primarily a domestic demand-driven economy, with consumption and investment accounting for 70% of the country’s economic activity. As the economic scenario has improved after recovering from the impact of the COVID-19 pandemic, various investments and developments have been made in various sectors of the economy.

According to the World Bank, India must continue to prioritize reducing inequality while embarking on growth-friendly policies to boost the economy. In light of this, the country has seen many developments in the recent past, some of which are mentioned below.

On July 15, 2022, India’s foreign exchange reserves reached US$572.71 billion.

• Investments in the private equity venture capital (PE-VC) sector were $34.1 billion, up 28% year-on-year, with 711 transactions from January to June 2022.
• India’s merchandise exports were US$676.2 billion in FY2022. In June 2022, India’s merchandise exports were US$37.9 billion, registering the largest exports highest in history in June 2022.
• PMI Services was 58.9 in May 2022 compared to 57.9 in April 2022.
• As of June 2022, the gross receipts from Goods and Services Tax (GST) amounted to Rs 1.44 trillion (US$18.1 billion).
• According to the Department for the Promotion of Industry and Internal Trade (DPIIT), the inflow of foreign direct investment in India between April 2000 and March 2022 was US$588.53 billion.
• In May 2022, the Industrial Production Index (PII) was 137.7, driven by the mining, manufacturing and electricity sectors.
• Consumer Price Index (CPI) inflation was 7.01% in June 2022, compared to 7.04% in May 2022.
• In July 2022 (until 21 July 2022), foreign portfolio investment (FPI) outflows amounted to Rs 228,862 crore (USD 28,650 million)
• 2021-22 Rabi wheat purchase and expected 2021-22 Kharif rice purchase would receive 1208 lakh (120.8 million) tons of wheat and rice from 163 lakh (16.7 million) farmers plus direct payment of the MSP value of Rs. 2.37 lakh crore ($31.74 billion) in their accounts.