Economic Survey 2023: Rebound in domestic consumption impressive

The Economic Survey 2023-24 notes that India’s economic resilience can be seen in the domestic stimulus to growth.  The Survey notes that while the growth of exports may have moderated in the second half of FY23, its surge in FY22 and the “first half of FY23 induced a shift in the gears of the production processes from mild acceleration to cruise mode”.

According to the Survey, by the time the growth of exports moderated, the rebound in domestic consumption had sufficiently matured to take forward the growth of the Indian economy.

The Survey notes that private consumption, as a percentage of GDP at 58.4 percent in Q2 of FY23, was the highest among the second quarters of all the years since 2013-14. The growth was supported by a rebound in contact-intensive sectors, such as trade, hotel, and transport.

The Survey observes that while domestic consumption rebounded in many economies, the rebound in India was impressive for its scale.

Citing Motilal Oswal’s Economic Activity Index, the Survey states that the index estimates that private consumption grew at a five-month high In November 2022 of 5.6 percent year-on-year (YoY), driven by auto sales and broad-based expansion of services.