The Finance Ministry has said in a report that GatiShakti (i.e. the National Master Plan for Multi-model Connectivity) and production-linked-incentive (PLI) schemes will help in spurring growth for the Indian economy by driving investment while offsetting the global headwinds.
The ministry has observed that Geopolitical conflicts and their consequent impact on food, fertilizer, and crude oil prices cast a cloud on the growth outlook globally. Ministry has remained confident in the resilience of the Indian economy to mitigate the impact. It has also pointed out that transient shocks may not have a big effect on real growth and inflation. But the ministry will be keen to observe how long the dislocations in energy and food markets persist in the financial year.
As per the figures quoted, it is being observed that labour force participation has been improving while the unemployment rate has been declining. Government’s commitment to provide support to the economically poor, the growth path ahead would likely be a more inclusive one.
Also, the Ministry has noted, that PMI services had also stayed in the expansionary zone for eight months on the back of the e-toll collection, e-waybills, railway freights, and air cargo, among others, complementing the robust manufacturing sector.
While the Private Final Consumption Expenditure (PFCE) for the current fiscal year is projected to be Rs. 140 trillion, or 59.3% of GDP. It is a slight improvement over 57.5% projected in the First Advance Estimates. In absolute terms, the FY22 PFCE projections in nominal terms are higher than pre-pandemic levels. But in terms of percentage share in GDP, it is lower than 61% in FY20.
Private consumption may be beginning to perk up, ministry noted, adding UPI transaction values had doubled in FY22 from transactions value of Rs. 41 lakh crores in fiscal year 2020-21 to Rs. 81 lakh crores in the fiscal year 2021-22.
Hence with the GatiShakti plan and PLI Indian is likely to act as the instruments for spurring growth even in this current uncertain environment.
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