Amidst a global economic slowdown, quite contrary to all possible estimates India has registered a very impressive growth rate of 7.2 per cent in the 2022-23 financial year. As usual the contribution from the service sector was much higher than other sectors in this regard. Yet, more than the success of the service sector, the satisfying part of this growth story has to do with the agricultural sector. The agriculture sector registered an encouraging four per cent growth in the last fiscal. Unfortunately the growth registered by the manufacturing sector was much below expectations, but the fact remains that this sector made a turnaround after performing poorly in the second and third quarters of the last fiscal year. In all, it’s a good show by the Indian economy, which not so long ago contracted by nearly 25 per cent due to the pandemic-induced lockdown. At the same time, India’s GDP growth rate also points towards the fact that the Indian economy is among the first in the world to come out of an economic slump. It may potentially emerge as one of the strongest economies of the world in the near future, provided it focuses on critical areas of the economy, which could act as roadblocks in the coming days.
Apart from growth in agriculture and service sectors, some other factors have also contributed in achieving the unexpected growth. For example, India’s trade deficit has been reduced to a great extent as an increase of four per cent in export was registered, while import reduced to 4.1 percent. It may appear as a welcome development but at the same time a decrease in import also points to less demand in the domestic market, which is not a healthy sign for any economy, despite the rise in GDP. A steady demand in the domestic market helps the economy grow at a much faster rate. Secondly, for the sake of healthy growth of the Indian economy, it is essential to strengthen the manufacturing sector, which is contributing minimally towards the country’s economic growth. The difference between the growth rate of agriculture and manufacturing sectors in the last quarter of the 2022-23 fiscal is nearly 25 per cent. It points to the fact that the great Indian manufacturing sector is gasping for life. On examining the trend, demand has been made to provide subsidies to this sector as has been done in the case of agriculture. The proposal has very little merit as it would affect the competitive capability of the sector. So, it would be advisable for the sector to try n survive on its own rather than look at the government for support. Also in the euphoria of attaining a growth rate of more than seven, the crucial fact that market response was rather timid, even after such an impressive growth should not be forgotten. Precautionary measures are still required to strengthen the Indian economy.
