Even as the economy comes out of the grips of the COVID-19 induced slowdown, private consumption --crucial to cement economic growth -- is yet to catch up to the pre-pandemic levels, the Economic Survey 2021-22 has said.
"Latest advance estimates suggest full recovery of all components on the demand side in 2021-22 except for private consumption. When compared to pre-pandemic levels, recovery is most significant in exports followed by government consumption and gross fixed capital formation. However, an equally strong recovery was seen in imports," the Survey, tabled earlier today in Parliament said.
Private consumption, a measure of all the money spent by consumers in the country to buy goods and services, rose 6.9 percent in 2021-22, reaching 97 percent of its pre-pandemic levels. Considering private final consumption expenditure is the largest contributor to the GDP, its return to 6-7 percent growth rates without the assistance of a favorable base is crucial. But with the pandemic wreaking havoc with household incomes, it is not a surprise that private spending is where it is.