GDP growth increased from 2.5% to 4.1% in March quarter, economy grew at 8.7% in FY22
The government on Tuesday released the Gross Domestic Product (GDP) data for the March quarter of 2021-22 as well as for the entire financial year. According to the data released by the Ministry of Statistics and Program Implementation (MoSPI), India’s GDP growth in the March quarter stood at 4.1%. It was 2.5% in the same quarter last year. The GDP growth for the full year (FY22) has been 8.7%. The GDP in FY21 was -6.6%.
GVA growth (YoY) jumped to 7.9% from 5.7% in the March quarter. GVA growth for the full year i.e. FY22 stood at 8.1% as against 4.8% in a year ago i.e. FY21. In the first quarter (April, May and June) of the financial year 2021-22, the GDP growth was 20.1%. The GDP growth rate grew at 8.4% in the second quarter (July, August and September) and 5.4% in the third quarter (October, November and December).
IMF cuts India’s GDP forecast
Recently, in April, the International Monetary Fund (IMF) reduced India’s GDP estimate by 80 basis points to 8.2% for the financial year 2022-23. In January, the IMF had forecast 9% growth. The growth forecast has been reduced in view of the Russia-Ukraine war. The IMF believes that the Russia-Ukraine war has increased crude oil prices and will adversely affect domestic consumption and private investment.
RBI Estimates
The Reserve Bank of India (RBI) had projected a GDP growth of 7.2% for FY23. RBI has projected 6.3% growth in FY24.
What is GDP?
GDP is one of the most common indicators used to track the health of the economy. GDP represents the value of all goods and services produced within a country over a specific time period. In this, foreign companies that produce within the country’s borders are also included. When the economy is healthy, unemployment levels are usually low.
There are two types of GDP
There are two types of GDP. Real GDP and Nominal GDP. In real GDP, the value of goods and services is calculated at the base year value or stable price. Currently, the base year for calculating GDP is 2011-12. That is, the calculation according to the rates of goods and services in 2011-12. Whereas nominal GDP is calculated on the current price.
How is GDP calculated?
A formula is used to calculate GDP. GDP=C+G+I+NX, here C means private consumption, G means government spending, I means investment and NX means net export.
What is GVA?
Gross Value Added (GVA) refers to the total output and income of an economy. It tells how many rupees worth of goods and services were produced in a given period after taking into account the input cost and raw material price. It also shows how much production has been done in a particular sector, industry or sector.
Simply put, GVA apart from telling about the overall health of the economy, it also tells which sectors are struggling and which are leading the recovery. From the perspective of national accounting, the figure obtained after deducting subsidies and taxes in GDP at the macro level is GVA.
