APRIL 2022 - MONTHLY REPORT

 

State of the Indian Economy 2022-23:

       Indian economy underwent wide-ranging structural and governance reforms that strengthened the economy's fundamentals by enhancing its overall efficiency during 2014-2022

          India’s Growth Outlook: with Optimism and Hope 

·         Indian economy is well placed to grow faster in the coming decade once the global shocks of the pandemic and the spike in commodity prices in 2022 fade away.The economy of India is made up of three sectors agriculture, industry and services, where Services account for 53%..

·    Indian economy is one of the fastest growing economies in the world. India's GDP growth is expected to remain robust in FY24. GDP forecast for FY24 to be in the range of 6-6.8 %.

Agriculture and Food Management· Private investment in agriculture increases to 9.3% in 2020-21

·        MSP for all mandated crops fixed at 1.5 times of all India weighted average cost of production   since 2018.

·         Institutional Credit to the Agricultural Sector continued to grow to 18.6 lakh crore in 2021-22

·       Foodgrains production in India saw sustained increase and stood at 315.7 million tonnes in 2021-  22.

·      Free foodgrains to about 81.4 crore beneficiaries under the National Food Security Act for one year from January 1, 2023.

·     About 11.3 crore farmers were covered under the Scheme in its April-July 2022-23 payment cycle.      

·    Rs 13,681 crores sanctioned for Post-Harvest Support and Community Farms under the Agriculture Infrastructure Fund.

 ·         Online, Competitive, Transparent Bidding System with 1.74 crore farmers and 2.39 lakh traders    put in place under the National Agriculture Market (e-NAM) Scheme.·          

·     Organic Farming being promoted through Farmer Producer Organisations (FPO) under the       Paramparagat Krishi Vikas Yojana (PKVY).

· India stands at the forefront to promote millets through the International Year of Millets    initiative.

Industry: Steady Recovery

        Overall Gross Value Added (GVA) by the Industrial Sector (for the first half of FY 22-23) rose                3.7 per cent, which is higher than the average growth of 2.8 per cent achieved in the first half of             the last decade.

·                       PMI manufacturing has remained in the expansion zone for 18 months since July 2021, and              Index of Industrial Production (IIP) grows at a healthy pace.  

Cr           Credit to Micro, Small and  Medium Enterprises (MSMEs)  as grown by an average of                      around 30% since January 2022 and  credit to large industry has    been showing double-digit                 growth since  October 2022.

El            Electronics exports rise nearly threefold, from US $4.4 billion in FY19 to US $11.6 Billion in             FY22.

In     India has become the second-largest mobile phone manufacturer globally, with         the production of handsets going up from 6 crore units in FY15 to 29 crore units in FY21

Fo            Foreign Direct Investment (FDI) flows into the Pharma Industry has risen four times, from            US $180 million in FY19 to US $699 million in FY22.

The        The Production Linked Incentive (PLI) schemes introduced across 14 categories, with an estimated capex of ₹4 lakh crore over the next five years, to plug India into global supply chains.

•  Production/sales worth ₹3.85 lakh crore and employment generation of 3.0 lakh have been recorded due to PLI schemes.
• Over 39,000 compliances have been reduced and more than 3500 provisions decriminalized as of January 2023. 

Services: Source of Strength

     The services sector is expected to grow at 9.1% in FY23, as against 8.4% (YoY) in FY22

•  Robust expansion in PMI services, indicative of service sector activity, observed since July 2022.
• India was among the top ten services exporting countries in 2021, with its share in world commercial services exports increasing from 3 per cent in 2015 to 4 per cent in 2021..
• Credit to services sector has grown by over 16% since July 2022.
• US$ 7.1 billion FDI equity i equity inflows in services sector in FY22.
• Contact-intensive services are set to reclaim pre-pandemic level growth rates in FY23.
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•  Sustained growth in the real estate sector is taking housing sales to pre-pandemic levels, with a 50% rise between 2021 and 2022.
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• Hotel occupancy rate has improved from 30-32% in April 2021 to 68-70% in November 2022.
• Tourism sector is showing signs of revival, with foreign tourist arrivals in India in FY23 growing month-on-month with resumption of scheduled international flights and easing of Covid-19 regulations.
• Digital platforms are transforming India’s financial services.
• India’s e-commerce market is projected to grow at 18 per cent annually through 2025.

External Sector

·                Merchandise exports were US$ 332.8 billion for April-December 2022.

·              India diversified its markets and increased its exports to Brazil, South Africa and Saudi Arabia.

·             To increase its market size and ensure better penetration, in 2022, CEPA with UAE and ECTA      with Australia come into force.India is the largest recipient of remittances in the world                 receiving US$ 100 bn in 2022.

·             Remittances are the second largest major source of external financing after service export

·               As of December 2022, Forex Reserves stood at US$ 563 bn covering 9.3 months of imports.

            Hence, recovering from pandemic-induced contraction, Russian-Ukraine conflict and     inflation, Indian economy is staging a broad based recovery across sectors, positioning to    ascend to the pre-pandemic growth path in FY23.