India's per capita GDP has increased eight times in real terms since it gained independence. The country has transitioned to a modern economy, with the proportion of industry and services in Gross Value Added (GVA) rising from 50% to 75%. India, which has become more globally integrated, currently exports a fifth of its output, compared to one-sixteenth at the time of independence. India also benefits from the demographic transition with the help of a lower infant mortality rate and a steady increase in the literacy rate. Therefore, with more equitable income distribution, better employment levels, and globally comparable social amenity provision, India's per capita GDP may expand in the next 25 years as it did in the previous 75 years.
India's economic story during the first half of the current financial year highlighted the unwavering support the government gave to its capital expenditure, which, in FY 2022–23 (until August 2022), stood 46.8% higher than the same period last year. India's overall employment situation has improved as a result of the rebound in economic activity across all sectors. For the fourth consecutive quarter ending in June 2022, the PLFS indicates that the urban unemployment rate is decreasing. In September 2022, net payroll additions at EPFO saw double-digit increase, which is indicative of greater economic formalisation. According to the Naukri Job Speak 5 Index, hiring growth was sustained in the majority of important industries in October 2022. The TeamLease Employment Outlook Report also shows an increase in recruiting activity in the September quarter, led by a comeback in new business gains, with India showing the greatest improvement in the index of hiring intentions.
In November 2022, the following key frequency indicators highlighted improved performances:
India is well-positioned to develop at a relatively brisk clip in the next years due to the priority given to macroeconomic stability in a world where monetary tightening has diminished growth prospects. Second, capital formation suffered as the private sector, both financial and non-financial, worked to rebuild balance sheets. As a result of the loan boom witnessed in the first decade and beyond, the financial system stress of the second decade of the millennium is now behind us. The financial and non-financial balance sheets of the private sector remain sound, and there are early indications of a new cycle of capital formation in the personal sector. Continuous capital spending by the central government encourages broad-based growth by encouraging private sector capital formation. GST revenues have increased significantly as a result of the significant increase in spending. A stronger economic recovery would allow the collections to stabilise at a high level, demonstrating the high revenue productivity of broad-based consumption. The retail, industrial, and services sectors have seen an increase in credit disbursement as a result of a banking system with adequate capital. The service sector will continue to grow as a result of the unmet demand in the sector and India's positive economic outlook. In the third quarter of FY 2022–23, service sector companies are optimistic about demand conditions, sales turnover, their hiring plans, and the general business environment.
Electricity consumption, manufacturing PMI, exports, power supply and other high-frequency indicators indicate that the pace of economic activity has fully recovered from the COVID-19 pandemic shock. Economic growth is anticipated to be fueled by the effective implementation of PLI schemes development of renewable energy sources while diversifying import dependence on crude oil and bolstering the banking sector. The recovery in the services sector is still going strong while manufacturing strength remains stable. There appears to be a strong desire for private sector investments. The stress tests conducted by the central bank show that banks are quite financially sound and ready to lend. Monthly GST receipts are strong, confirming the economic activity's vigour. The successful launch of the Production Linked Incentive Scheme, developing renewable energy sources while diversifying import dependence on crude oil and strengthening the financial sector is expected to drive economic growth. Industrial metal prices have dropped to their lowest level in sixteen months, and other food-related commodities have seen a decline in price from their peaks as well. With the economic scenario improving on recovering from the COVID-19 pandemic shock, the Indian economy has remained resilient and provides a positive growth potential ahead.
Between April 2000-June 2022, cumulative FDI equity inflows to India stood at US$ 604,996 million. The central government finances registered improved performances. In the review period, the corporation tax recorded 91.6% YoY growth. Between April 2021 and October 2021, custom revenue collection registered 122.3% YoY growth, and the IGST collection to the Centre increased by 40% YoY, primarily due to the recovery of economic activities. Net collections of direct taxes in FY 2021-22 (until March 16, 2022) stood at Rs. 13.63 trillion (US$ 175.83 billion) compared to Rs. 9.18 trillion (US$ 118.42 billion) in FY 2020-21.
Note: Conversion rate used for November 2022 (as of November 30, 2022) is Rs. 1 = US$ 0.012