Share of exports in GDP grows in FY22.

Indian economy grew by 8.7% during the FY 2021-22 according to the provisional estimates released by the NSO on 31?st?May 2022. This makes India the fastest-growing major economy in the world. This growth rate is below expectation. The growth forecasts for the year by the Economic Survey of India and NSO were 9.2% and 8.9% respectively. GVA (Gross Value Added) growth rate was recorded at 8.1% for the year.

Key takeaways from the Provisional Estimates released:

• Even though GDP grew at an impressive rate of 8.7%, it was mostly due to the low base of the preceding pandemic year. For context, GDP only grew by 2% from the pre-pandemic year of 2019-20. NDP (GDP-Depreciation) remains stagnant at the pre-pandemic level.
• The nominal growth rate was recorded at 19.5% for the year as compared to the real growth rate of 8.7%, clearly stating the impact of inflation. We should be expecting further rate hikes by RBI
• Per capita GDP was recorded below the pre-pandemic level indicating the growth rate of the population was greater than the growth rate of the economy during the pandemic period of FY 2019-22
• Trade intensity at 48% is 6% more than the pre-pandemic level signals a strong recovery in international trade for India. Increasing the share of export in GDP from 19% at a pre-pandemic level to around 22% is positive for India's economy.
• GVA has shown a resilient growth rate at 8.1% for the year and at 3% from the pre-pandemic level. The manufacturing sector has shown the strongest recovery with a GVA growth rate of 9% from the pre-pandemic level. Contact intensive economic activity such as hospitality is shown yet to recover from the impact of the pandemic with their GVA down 11% from the pre-pandemic level.
• The GVA growth rate for agriculture and construction-related economic activity was recorded at 6% and 3% respectively from the pre-pandemic level.

Conclusion

?The Indian economy has shown a resilient recovery post-pandemic with all economic activities except one having a positive GVA growth rate from the pre-pandemic level. Inflation due to supply-side negative shock arising out of the international conflict is a cause of concern that may induce RBI to further increase the interest rate which could hamper India's economic recovery path. Hence, it has become extremely crucial for the government to find some steady short-term as well as long-term solutions to India's supply-side challenges.

Notifications

Ministry of Commerce released trade data for May 2022 –

India’s merchandise export rises 15.46% to USD 37.3 billion in May, 2022 as compared to USD 32.30 billion in May 2021, recording highest ever exports in May 2022

Exchange Rate Notification-?

Exchange Rate Notification No. 49/2022 - Customs (N.T.)

Cabinet allows procurement by 'Cooperatives' as buyers on GeM-

Cabinet approves Expanding the mandate of Government e Marketplace - Special Purpose Vehicle (GeM - SPV) to allow procurement by Cooperatives as Buyers

CBIC

?Exchange rate notification?

https://www.cbic.gov.in/resources//htdocs-cbec/customs/cs-act/notifications/notfns-2022/cs-nt2022/csnt49-2022.pdf;jsessionid=13A19EEBA6C0FA82951AA839A8ACE203

RBI

https://www.rbi.org.in/Scripts/ECBUserView.aspx?Id=223