HOW TO REV UP THE REVIVAL
Q. IS THE INDIAN ECONOMY BACK ON TRACK? HOW DO YOU READ THE RECENT Q2 NUMBERS?
Yes and no, depending upon how you define ‘track’. At Rs 35.73 lakh crore, GDP in the second quarter of 2021-22 was marginally higher than for the corresponding quarter in 2019-20 (Rs 35.62 lakh crore). This shows ‘recovery’ is on track. However, the GDP of the first six months of 2021-22 (Rs 68.11 lakh crore) was materially lower than in the first half of 2019-20 (Rs 71.28 lakh crore). So, in half yearly terms, recovery is not on track. We were growing at over 7 per cent per annum for five years before Covid-19 hit. Thereafter, we have not grown at all as we have not got back to the level of value added two years before in the first half. Q2 numbers for 2021-22 point to some more worrying factors. At Rs 19.48 lakh crore, private final consumption expenditure (PFCE) in Q2 of 2021-22 was lower than in Q2 of 2019-20 (Rs 20.20 lakh crore). Indians are eating and consuming other goods and services at levels lower than pre-Covid times. The government is also spending less on consumption (Rs 3.61 lakh crore in Q2 of 2021-22 against Rs 4.35 lakh crore in Q2 of 2019-20). Capital formation has barely crossed it (Rs 11.43 lakh
