The Annual Economic Review report for May 2023 was issued by the Finance Ministry on Thursday. According to the study, a robust fourth quarter helped India’s GDP reach 7.2% in FY 23. This is higher than the February projection of 7%.
The study also said that consumption and investment have surpassed pre-pandemic levels on a quarterly basis.
“However, domestic demand has bounced back since then and has become stronger in FY23. According to the Finance Ministry’s study, this led to a close convergence of the quarterly growth trajectories before and after the epidemic.
According to the study, the economy did not do well in the second half of FY23 due to foreign demand.
The real GDP trends prior to and following the epidemic will likewise converge once external demand gets going. In FY23, the demand side was well served by the supply side, it said.
In the most recent quarter, the agriculture sector’s growth rate set a 12-quarter high. In Q4, the industrial sector recovered, helped by the manufacturing sector. The contact-intensive services industry was completely back to its pre-pandemic depth and scope by year’s end.
According to the research, higher employment levels increased domestic demand.
In keeping with the pre-pandemic pattern, the labor force participation rate (LFPR) in India increased during the pandemic. The worker-population ratio increased while the national unemployment rate decreased to a five-year low of 4.1% in FY22.
In FY23, which was more recent, the urban unemployment rate decreased each quarter, demonstrating the nation’s employment levels’ sustained development.
“Several policy changes made over the past several years have contributed to rising employment levels in part. The corporate sector was reinforced, small businesses were helped, doing business became easier, and foreign money was drawn, all of which increased the economy’s potential to create jobs, according to the report.
By the end of FY23, India was able to transmit a 40–45% rise in lending and deposit rates thanks to an increase in repo rates, according to the report.
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