Deprecated (16384): The ArrayAccess methods will be removed in 4.0.0.Use getParam(), getData() and getQuery() instead. - /home/brlfuser/public_html/src/Controller/ArtileDetailController.php, line: 73
 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php. [CORE/src/Core/functions.php, line 311]
Code Context


        trigger_error($message, E_USER_DEPRECATED);

    }
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 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php.'
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deprecationWarning - CORE/src/Core/functions.php, line 311
Cake\Http\ServerRequest::offsetGet() - CORE/src/Http/ServerRequest.php, line 2421
App\Controller\ArtileDetailController::printArticle() - APP/Controller/ArtileDetailController.php, line 73
Cake\Controller\Controller::invokeAction() - CORE/src/Controller/Controller.php, line 610
Cake\Http\ActionDispatcher::_invoke() - CORE/src/Http/ActionDispatcher.php, line 120
Cake\Http\ActionDispatcher::dispatch() - CORE/src/Http/ActionDispatcher.php, line 94
Cake\Http\BaseApplication::__invoke() - CORE/src/Http/BaseApplication.php, line 235
Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
Cake\Routing\Middleware\RoutingMiddleware::__invoke() - CORE/src/Routing/Middleware/RoutingMiddleware.php, line 162
Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
Cake\Routing\Middleware\AssetMiddleware::__invoke() - CORE/src/Routing/Middleware/AssetMiddleware.php, line 88
Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
Cake\Error\Middleware\ErrorHandlerMiddleware::__invoke() - CORE/src/Error/Middleware/ErrorHandlerMiddleware.php, line 96
Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
Cake\Http\Runner::run() - CORE/src/Http/Runner.php, line 51
Cake\Http\Server::run() - CORE/src/Http/Server.php, line 98

Deprecated (16384): The ArrayAccess methods will be removed in 4.0.0.Use getParam(), getData() and getQuery() instead. - /home/brlfuser/public_html/src/Controller/ArtileDetailController.php, line: 74
 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php. [CORE/src/Core/functions.php, line 311]
Code Context


        trigger_error($message, E_USER_DEPRECATED);

    }
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 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php.'
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deprecationWarning - CORE/src/Core/functions.php, line 311
Cake\Http\ServerRequest::offsetGet() - CORE/src/Http/ServerRequest.php, line 2421
App\Controller\ArtileDetailController::printArticle() - APP/Controller/ArtileDetailController.php, line 74
Cake\Controller\Controller::invokeAction() - CORE/src/Controller/Controller.php, line 610
Cake\Http\ActionDispatcher::_invoke() - CORE/src/Http/ActionDispatcher.php, line 120
Cake\Http\ActionDispatcher::dispatch() - CORE/src/Http/ActionDispatcher.php, line 94
Cake\Http\BaseApplication::__invoke() - CORE/src/Http/BaseApplication.php, line 235
Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
Cake\Routing\Middleware\RoutingMiddleware::__invoke() - CORE/src/Routing/Middleware/RoutingMiddleware.php, line 162
Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
Cake\Routing\Middleware\AssetMiddleware::__invoke() - CORE/src/Routing/Middleware/AssetMiddleware.php, line 88
Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
Cake\Error\Middleware\ErrorHandlerMiddleware::__invoke() - CORE/src/Error/Middleware/ErrorHandlerMiddleware.php, line 96
Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
Cake\Http\Runner::run() - CORE/src/Http/Runner.php, line 51
Cake\Http\Server::run() - CORE/src/Http/Server.php, line 98

Warning (512): Unable to emit headers. Headers sent in file=/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Error/Debugger.php line=853 [CORE/src/Http/ResponseEmitter.php, line 48]
Code Context
            if (Configure::read('debug')) {

                trigger_error($message, E_USER_WARNING);

            } else {
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		&#039;id&#039; =&gt; (int) 63693,
		&#039;title&#039; =&gt; &#039;Realistic analysis shows that the Indian economy has simply taken little steps in Q1 instead of a quantum leap&#039;,
		&#039;subheading&#039; =&gt; null,
		&#039;description&#039; =&gt; &#039;&lt;p style=&quot;text-align:justify&quot;&gt;There is euphoria abound about India&amp;#39;s growth performance during the first quarter of the current fiscal. As compared to the corresponding period last year, the year-on-year (y-o-y) GDP growth in the first quarter (Q1) of 2022-23 is down. However, one should take into account the fact that the high growth performance of the real GDP in Q1 of 2021-22 was due to the low base in the corresponding period of the first pandemic year. The optimism surrounding y-o-y&amp;nbsp;real GDP growth in the first quarter this year therefore appears to be natural.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;On further delving into the data, it can be discovered that after two years of the pandemic, the GDP in the Q1 of the current fiscal, crossed the GDP figure corresponding to the Q1 of 2019-20. Please see chart-1.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Chart%201%20Quarterly%20Estimates%20of%20Expenditure%20Components%20of%20GDP%20for%20Q1%20at%202011-12%20Prices%20in%20Rs.%20Crore%281%29.png&quot; style=&quot;height:687px; width:997px&quot; /&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source: **&lt;/strong&gt; Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2022-23, released on 31 August, 2022, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;*&lt;/strong&gt; Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2021-22, released on 31 August, 2021, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2021-22.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;##&lt;/strong&gt; Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2020-21, released on 31 August, 2020, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;# &lt;/strong&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2019-20, released on 30 August, 2019, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2019-20.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;
&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Growth in the real GDP is vital because it provides the government with additional revenue to spend. When the economy expands, it signifies that the economic activities are reaching the level as they existed during the normal times i.e., before the pandemic had struck. With the return of the economy to normalcy, employment generation is expected to take place. Employment creation can lead to a resurgence in effective demand i.e., purchasing power.&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Measuring real GDP growth after 2 years of the pandemic&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;The GDP at constant prices expanded by &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022.pdf&quot;&gt;4.1 percent in the last quarter (Q4)&lt;/a&gt; of 2021-22. While the real economy grew y-o-y by 13.51 percent in the Q1 as compared to a y-o-y real GDP growth of 20.08 percent in the corresponding period last year, a different picture emerges when the base is shifted to Q1 GDP in the pre-covid times. As compared to the 3-year average of the Q1 GDP pertaining to 2017-18, 2018-19, and 2019-20, the real GDP in the first quarter of the current fiscal expanded by 9.58 percent i.e., less than the y-o-y growth of 13.51 percent. Please take a&amp;nbsp;look at table-1.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Table 1: Quarterly Estimates of Expenditure Components of GDP for Q1 (April-June) at 2011-12 Prices, various years (in Rs. Crore)&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Table%201%20Quarterly%20Estimates%20of%20Expenditure%20Components%20of%20GDP%20for%20Q1%20at%202011-12%20Prices%20in%20Rs.%20Crore.png&quot; style=&quot;height:309px; width:874px&quot; /&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source: &lt;/strong&gt;Same as chart-1&lt;br /&gt;
&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;
&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;As compared to the 3-year average of the GDP during the first quarter of 2017-18, 2018-19 and 2019-20, the real GDP in the corresponding period last year contracted by 3.46 percent. As opposed to that, the y-o-y GDP expansion was to the tune of 20.08 percent in Q1 of 2021-22. Thus, the real GDP growth changes with the change in base and also the base year.&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;All the high frequency indicators aren&amp;rsquo;t moving in the same direction&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;After the completion of the first quarter of the current fiscal, the Ministry of Statistics and Programme Implementation (MoSPI) has provided the first estimate of the Q1&amp;rsquo;s GDP. On the basis of about &lt;a href=&quot;/upload/files/High%20frequency%20indicators.png&quot;&gt;20 high frequency indicators&lt;/a&gt;, the sector-wise estimates have been compiled by the ministry. Out of the 20 indicators, in the case of &amp;#39;total telephone subscribers&amp;#39; &lt;em&gt;(-2.5 percent)&lt;/em&gt;, &amp;#39;cargo handled at airports&amp;#39; &lt;em&gt;(-1.7 percent)&lt;/em&gt;, and &amp;#39;Index of Industrial Production (IIP) pertaining to metallic minerals&amp;#39; &lt;em&gt;(-6.5 percent)&lt;/em&gt;, there has been y-o-y contractions in Q1 of 2022-23 as opposed to positive growths in the corresponding period last year. &amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;In the case of certain high frequency indicators like &amp;#39;production of cement&amp;#39;, &amp;#39;consumption of steel&amp;#39;, &amp;#39;sales of commercial vehicles&amp;#39;, &amp;#39;purchase of private vehicles&amp;#39;, &amp;#39;cargo handled at major sea ports&amp;#39;, &amp;#39;passengers handled at airports&amp;#39;, &amp;#39;IIP pertaining to mining and manufacturing&amp;#39;, &amp;#39;net tonne kilometer - railways&amp;#39;, etc., the y-o-y percentage growth has reduced between Q1 of 2021-22 and Q1 of 2022-23.&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Two-wheeler sale to the average Indian citizen still down&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Some economists tend to use the data on two-wheeler sale, which is provided by the industry body &lt;a href=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot;&gt;Society of Indian Automobile Manufacturers (SIAM)&lt;/a&gt;. However, the SIAM data is related to the number of units which is &lt;a href=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot;&gt;sold by the manufacturers to dealers&lt;/a&gt; across the country. During economic slowdown, dealers may be unable to sell the products they purchase from manufacturers, which could lead to building up of inventory with the former. Hence, the SIAM data may not capture the real situation i.e., the number of two-wheelers bought by the final consumers.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Chart%202%20Two%20wheeler%20vehicles%20registered%20in%20Q1%20of%20various%20years.png&quot; style=&quot;height:555px; width:780px&quot; /&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source: &lt;/strong&gt;Vahan registration website,&amp;nbsp;Ministry of Road Transport and Highways,&amp;nbsp;please &lt;a href=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;br /&gt;
&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;
&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Instead of using SIAM data on two-wheeler sale, the data&amp;nbsp;that is provided by &lt;a href=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot;&gt;Vahan dashboard&lt;/a&gt; on vehicle registration, is used in the present piece. As compared to the 3-year average of the number of two-wheelers &lt;em&gt;(sum of non-transport and transport-two-wheelers) &lt;/em&gt;registered during April-June of 2017, 2018 and 2019, the number of two-wheeler vehicles registered in the first quarters of 2020, 2021 and 2022 has been lower. In short, if the number of two-wheelers registered is used for analysis, then it shows that the purchasing power of the average Indian consumer has still not reached the pre-pandemic level.&amp;nbsp;Please have a look at chart-2.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Whatever happened to consumer demand?&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;The Private Final Consumption Expenditure (PFCE) &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;represents the value of goods and services&lt;/a&gt; &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;consumed by the households&lt;/a&gt; and &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;the private non-profit institutions&lt;/a&gt; &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;serving households (NPISHs)&lt;/a&gt; in the period extending from the beginning of April of one calendar year to the end of March of the next. In 2021-22 &lt;em&gt;(provisional estimates)&lt;/em&gt;, PFCE&amp;nbsp;i.e., final consumer spending &lt;em&gt;(at 2011-12 prices) &lt;/em&gt;as a proportion of GDP &lt;em&gt;(at 2011-12 prices) &lt;/em&gt;was 56.85 percent. Therefore, the revival of consumer demand is essential for boosting economic growth. The y-o-y growth rates of PFCE &lt;em&gt;(at constant prices) &lt;/em&gt;were 8.88 percent in 2017-18, 6.61 percent in 2018-19, and 4.45 percent in 2019-20 &lt;em&gt;(2nd revised estimates)&lt;/em&gt;. However, the y-o-y growth rates of PFCE &lt;em&gt;(at constant price)&lt;/em&gt; dipped to -6.0 percent in 2020-21 &lt;em&gt;(1st RE)&lt;/em&gt; but bounced back to 7.91 percent in 2021-22 &lt;em&gt;(PE)&lt;/em&gt;. Please see table-2.&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Table 2: Provisional Estimates of National Income and Expenditure Components of GDP, various years (at 2011- 12 Prices)&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Table%202%20Provisional%20Estimates%20of%20National%20Income%20and%20Expenditure%20Components%20of%20GDP%20various%20years%20at%202011-12%20Prices.png&quot; style=&quot;height:523px; width:1050px&quot; /&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source:&lt;/strong&gt; &lt;strong&gt;**&lt;/strong&gt; Press Note on Provisional Estimates of Annual National Income 2021-22 and Quarterly Estimates of Gross Domestic Product for the Fourth Quarter (Q4) of 2021-22, released on 31 May 2022, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;#&lt;/strong&gt; Press Note on First Advance Estimates of National Income 2020-21, released on 7 January, 2021, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;## &lt;/strong&gt;Press Note on First Advance Estimates of National Income 2019-20, released on 7 January, 2020, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;#* &lt;/strong&gt;Press Note on First Advance Estimates of National Income 2018-19, released on 7 January, 2019, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;^* &lt;/strong&gt;Press Note on First Advance Estimates of National Income 2017-18, released on 5 January, 2018, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;^^ &lt;/strong&gt;Press Note on Provisional Estimates of National Income 2016-17, released on 31 May, 2017, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1aiEDfCYkTynV-ucq46fwJKffZosApMMk/edit?usp=sharing&amp;amp;ouid=112233925171588304692&amp;amp;rtpof=true&amp;amp;sd=true&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;
&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;As compared to the 3-year average of the PFCE &lt;em&gt;(at constant prices)&lt;/em&gt; pertaining to 2017-18, 2018-19, and 2019-20 &lt;em&gt;(2nd RE)&lt;/em&gt;, the real PFCE in 2020-21 &lt;em&gt;(1st RE)&lt;/em&gt; and 2021-22 &lt;em&gt;(PE)&lt;/em&gt; grew by -1.25 percent and 6.56 percent, respectively. The advance estimates of GDP &lt;em&gt;(at 2011-12 prices) &lt;/em&gt;for 2022-23 would be released in January next year. Till then, we will have to wait for commenting further about the sustained growth of consumer demand. &lt;a href=&quot;https://www.mse.ac.in/wp-content/uploads/2020/02/Ind-exp.-dec-13-Mind-the-statistics-gap.pdf&quot;&gt;Experts have suggested&lt;/a&gt; that in order to gauge consumer demand and income poverty, consumption expenditure survey of households by the National Statistical Office (NSO) needs to be done and the results are required to be published along with the release of&amp;nbsp;unit-level data. It is worth noting that the &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;gap between the National Accounts Statistics (NAS)&lt;/a&gt; &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;estimates of PFCE&lt;/a&gt; and the &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;National Sample Survey (NSS)&lt;/a&gt; &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;estimates of household consumption expenditure&lt;/a&gt;&amp;nbsp;&lt;em&gt;(aggregated at the national level)&lt;/em&gt; has grown progressively over the years.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;An alternative perspective&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;As said earlier, the y-o-y growth of GDP at constant prices during Q1 of 2022-23 was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;13.5 percent&lt;/a&gt;, whereas the y-o-y growth of GDP at current prices during the same period was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;26.7 percent&lt;/a&gt;. It means that the GDP deflator grew y-o-y by 13.2 percent.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Likewise, the y-o-y growth of real Gross Value Added (GVA) at basic prices during Q1 of 2022-23 was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;12.7 percent&lt;/a&gt;, whereas the y-o-y growth of GVA at basic prices at current prices during the same period was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;26.5 percent&lt;/a&gt;. So, the GVA deflator grew y-o-y by 13.8 percent.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;In order to arrive at GDP at constant prices from GDP at current prices, one needs a deflator. In the case of &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;single deflation method&lt;/a&gt;, a common price deflator is utilised to adjust both input and output prices. For &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;double deflation method&lt;/a&gt;, one needs two different deflators for adjusting input and output prices. In India, double deflation is done for agriculture, and mining and quarrying, whereas single deflation is used for other sectors. Thus, in &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;our country, a mix&lt;/a&gt; of single and double deflation methods is used. &amp;nbsp;&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;A &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;recent analysis&lt;/a&gt; by Pragya Srivastava, published in Livemint.com, tells us that the GDP deflator on an average reflects 70 percent of the Wholesale Price Index (WPI) and 30 percent of the Consumer Price Index (CPI). As per HSBC Global Research, input prices &lt;em&gt;(reflected by WPI rise) &lt;/em&gt;in the Q1 of 2022-23 have grown faster than the output prices &lt;em&gt;(indicated by the CPI increase)&lt;/em&gt;, possibly leading to an underestimation of GVA growth, and therefore GDP growth. Remember, &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;GDP at market prices&lt;/a&gt; is derived as the &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;sum of the GVA at basic prices&lt;/a&gt;, &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;plus all taxes on products&lt;/a&gt;, &lt;a href=&quot;https://pib.gov.in/PressReleasePage.aspx?PRID=1723153&quot;&gt;less all subsidies on products&lt;/a&gt;. In the case of single deflation method, if input &lt;em&gt;(indicated by WPI) &lt;/em&gt;and output &lt;em&gt;(reflected by CPI)&lt;/em&gt; prices expand at different rates, then it may cause overestimation or underestimation of economic performance.&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;A technical discussion by Jyoti Sharma &lt;em&gt;(please click &lt;a href=&quot;https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html&quot;&gt;here&lt;/a&gt; and &lt;a href=&quot;https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html&quot;&gt;here&lt;/a&gt; to access)&lt;/em&gt; informs us that ideally, the GDP deflator of the MoSPI lies in the range {min. (CPI, WPI), max. (CPI, WPI)} i.e., the deflator must fall in the range defined by minimum of CPI and WPI and maximum of CPI and WPI for a sector. She proposes that in the case of double deflation method, CPI as a deflator for output value, and WPI for input value should be used. Instead of going for mix method, which India uses, one should go for either single or double deflation method across the sectors and sub-sectors in order to compare the trends across sectors.&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;&lt;em&gt;References:&amp;nbsp;&lt;/em&gt;&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2022-23, released on 31 August, 2022, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2021-22, released on 31 August, 2021, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2021-22.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2020-21, released on 31 August, 2020, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2019-20, released on 30 August, 2019, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2019-20.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Vahan registration website,&amp;nbsp;Ministry of Road Transport and Highways,&amp;nbsp;please &lt;a href=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Provisional Estimates of Annual National Income 2021-22 and Quarterly Estimates of Gross Domestic Product for the Fourth Quarter (Q4) of 2021-22, released on 31 May 2022, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2020-21, released on 7 January, 2021, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2019-20, released on 7 January, 2020, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2018-19, released on 7 January, 2019, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2017-18, released on 5 January, 2018, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Provisional Estimates of National Income 2016-17, released on 31 May, 2017, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press release: Provisional estimates of Annual National Income, 2020-21 and Quarterly estimates (Q4) of Gross Domestic Product, 2020-21, Ministry of Statistics &amp;amp; Programme Implementation, Press Information Bureau, released on 31 May, 2021, please click &lt;a href=&quot;https://pib.gov.in/PressReleasePage.aspx?PRID=1723153&quot;&gt;here&lt;/a&gt; and &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;here&lt;/a&gt; to access &amp;nbsp;&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Estimates of Food Consumption Expenditure from Household Surveys and National Accounts -AC Kulshreshtha and Aloke Kar, Central Statistical Organisation (CSO), please &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Is the GDP number an underestimate? -Pragya Srivastava, Livemint.com, 2 September, 2022, please &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html &quot;&gt;click here&lt;/a&gt; to access&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;The Real Story Behind India&amp;rsquo;s Two Wheeler Sales or Rather the Lack of It -Vivek Kaul, 19 November, 2020, please &lt;a href=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Mind the statistics gap -C Rangarajan and S Mahendra Dev, The Indian Express, 13 December, 2019, please &lt;a href=&quot;https://bit.ly/3Dsq9y2&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;India&amp;rsquo;s GDP: Deflating the right way -Jyoti Sharma, Ideas for India, 12 October, 2017, please &lt;a href=&quot;https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html&quot;&gt;click here&lt;/a&gt; to access&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;India&amp;rsquo;s GDP: Deflating the right way -Jyoti Sharma, Livemint.com, 12 October, 2017, please &lt;a href=&quot;https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html &quot;&gt;click here&lt;/a&gt; to access&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Image Courtesy: Inclusive Media for Change/ Shambhu Ghatak&lt;/strong&gt;&lt;/p&gt;
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	&#039;metaTitle&#039; =&gt; &#039;NEWS ALERTS | Realistic analysis shows that the Indian economy has simply taken little steps in Q1 instead of a quantum leap&#039;,
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	&#039;metaDesc&#039; =&gt; &#039;There is euphoria abound about India&amp;#39;s growth performance during the first quarter of the current fiscal. As compared to the corresponding period last year, the year-on-year (y-o-y) GDP growth in the first quarter (Q1) of 2022-23 is down. However, one...&#039;,
	&#039;disp&#039; =&gt; &#039;&lt;p style=&quot;text-align:justify&quot;&gt;There is euphoria abound about India&amp;#39;s growth performance during the first quarter of the current fiscal. As compared to the corresponding period last year, the year-on-year (y-o-y) GDP growth in the first quarter (Q1) of 2022-23 is down. However, one should take into account the fact that the high growth performance of the real GDP in Q1 of 2021-22 was due to the low base in the corresponding period of the first pandemic year. The optimism surrounding y-o-y&amp;nbsp;real GDP growth in the first quarter this year therefore appears to be natural.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;On further delving into the data, it can be discovered that after two years of the pandemic, the GDP in the Q1 of the current fiscal, crossed the GDP figure corresponding to the Q1 of 2019-20. Please see chart-1.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Chart%201%20Quarterly%20Estimates%20of%20Expenditure%20Components%20of%20GDP%20for%20Q1%20at%202011-12%20Prices%20in%20Rs.%20Crore%281%29.png&quot; style=&quot;height:687px; width:997px&quot; /&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source: **&lt;/strong&gt; Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2022-23, released on 31 August, 2022, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;*&lt;/strong&gt; Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2021-22, released on 31 August, 2021, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2021-22.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2021-22.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;##&lt;/strong&gt; Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2020-21, released on 31 August, 2020, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;# &lt;/strong&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2019-20, released on 30 August, 2019, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2019-20.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2019-20.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot; title=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Growth in the real GDP is vital because it provides the government with additional revenue to spend. When the economy expands, it signifies that the economic activities are reaching the level as they existed during the normal times i.e., before the pandemic had struck. With the return of the economy to normalcy, employment generation is expected to take place. Employment creation can lead to a resurgence in effective demand i.e., purchasing power.&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Measuring real GDP growth after 2 years of the pandemic&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;The GDP at constant prices expanded by &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022.pdf&quot;&gt;4.1 percent in the last quarter (Q4)&lt;/a&gt; of 2021-22. While the real economy grew y-o-y by 13.51 percent in the Q1 as compared to a y-o-y real GDP growth of 20.08 percent in the corresponding period last year, a different picture emerges when the base is shifted to Q1 GDP in the pre-covid times. As compared to the 3-year average of the Q1 GDP pertaining to 2017-18, 2018-19, and 2019-20, the real GDP in the first quarter of the current fiscal expanded by 9.58 percent i.e., less than the y-o-y growth of 13.51 percent. Please take a&amp;nbsp;look at table-1.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Table 1: Quarterly Estimates of Expenditure Components of GDP for Q1 (April-June) at 2011-12 Prices, various years (in Rs. Crore)&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Table%201%20Quarterly%20Estimates%20of%20Expenditure%20Components%20of%20GDP%20for%20Q1%20at%202011-12%20Prices%20in%20Rs.%20Crore.png&quot; style=&quot;height:309px; width:874px&quot; /&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source: &lt;/strong&gt;Same as chart-1&lt;br /&gt;&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot; title=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;As compared to the 3-year average of the GDP during the first quarter of 2017-18, 2018-19 and 2019-20, the real GDP in the corresponding period last year contracted by 3.46 percent. As opposed to that, the y-o-y GDP expansion was to the tune of 20.08 percent in Q1 of 2021-22. Thus, the real GDP growth changes with the change in base and also the base year.&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;All the high frequency indicators aren&amp;rsquo;t moving in the same direction&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;After the completion of the first quarter of the current fiscal, the Ministry of Statistics and Programme Implementation (MoSPI) has provided the first estimate of the Q1&amp;rsquo;s GDP. On the basis of about &lt;a href=&quot;/upload/files/High%20frequency%20indicators.png&quot; title=&quot;/upload/files/High%20frequency%20indicators.png&quot;&gt;20 high frequency indicators&lt;/a&gt;, the sector-wise estimates have been compiled by the ministry. Out of the 20 indicators, in the case of &amp;#39;total telephone subscribers&amp;#39; &lt;em&gt;(-2.5 percent)&lt;/em&gt;, &amp;#39;cargo handled at airports&amp;#39; &lt;em&gt;(-1.7 percent)&lt;/em&gt;, and &amp;#39;Index of Industrial Production (IIP) pertaining to metallic minerals&amp;#39; &lt;em&gt;(-6.5 percent)&lt;/em&gt;, there has been y-o-y contractions in Q1 of 2022-23 as opposed to positive growths in the corresponding period last year. &amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;In the case of certain high frequency indicators like &amp;#39;production of cement&amp;#39;, &amp;#39;consumption of steel&amp;#39;, &amp;#39;sales of commercial vehicles&amp;#39;, &amp;#39;purchase of private vehicles&amp;#39;, &amp;#39;cargo handled at major sea ports&amp;#39;, &amp;#39;passengers handled at airports&amp;#39;, &amp;#39;IIP pertaining to mining and manufacturing&amp;#39;, &amp;#39;net tonne kilometer - railways&amp;#39;, etc., the y-o-y percentage growth has reduced between Q1 of 2021-22 and Q1 of 2022-23.&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Two-wheeler sale to the average Indian citizen still down&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Some economists tend to use the data on two-wheeler sale, which is provided by the industry body &lt;a href=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot; title=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot;&gt;Society of Indian Automobile Manufacturers (SIAM)&lt;/a&gt;. However, the SIAM data is related to the number of units which is &lt;a href=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot; title=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot;&gt;sold by the manufacturers to dealers&lt;/a&gt; across the country. During economic slowdown, dealers may be unable to sell the products they purchase from manufacturers, which could lead to building up of inventory with the former. Hence, the SIAM data may not capture the real situation i.e., the number of two-wheelers bought by the final consumers.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Chart%202%20Two%20wheeler%20vehicles%20registered%20in%20Q1%20of%20various%20years.png&quot; style=&quot;height:555px; width:780px&quot; /&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source: &lt;/strong&gt;Vahan registration website,&amp;nbsp;Ministry of Road Transport and Highways,&amp;nbsp;please &lt;a href=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot; title=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;br /&gt;&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot; title=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Instead of using SIAM data on two-wheeler sale, the data&amp;nbsp;that is provided by &lt;a href=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot; title=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot;&gt;Vahan dashboard&lt;/a&gt; on vehicle registration, is used in the present piece. As compared to the 3-year average of the number of two-wheelers &lt;em&gt;(sum of non-transport and transport-two-wheelers) &lt;/em&gt;registered during April-June of 2017, 2018 and 2019, the number of two-wheeler vehicles registered in the first quarters of 2020, 2021 and 2022 has been lower. In short, if the number of two-wheelers registered is used for analysis, then it shows that the purchasing power of the average Indian consumer has still not reached the pre-pandemic level.&amp;nbsp;Please have a look at chart-2.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Whatever happened to consumer demand?&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;The Private Final Consumption Expenditure (PFCE) &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;represents the value of goods and services&lt;/a&gt; &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;consumed by the households&lt;/a&gt; and &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;the private non-profit institutions&lt;/a&gt; &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;serving households (NPISHs)&lt;/a&gt; in the period extending from the beginning of April of one calendar year to the end of March of the next. In 2021-22 &lt;em&gt;(provisional estimates)&lt;/em&gt;, PFCE&amp;nbsp;i.e., final consumer spending &lt;em&gt;(at 2011-12 prices) &lt;/em&gt;as a proportion of GDP &lt;em&gt;(at 2011-12 prices) &lt;/em&gt;was 56.85 percent. Therefore, the revival of consumer demand is essential for boosting economic growth. The y-o-y growth rates of PFCE &lt;em&gt;(at constant prices) &lt;/em&gt;were 8.88 percent in 2017-18, 6.61 percent in 2018-19, and 4.45 percent in 2019-20 &lt;em&gt;(2nd revised estimates)&lt;/em&gt;. However, the y-o-y growth rates of PFCE &lt;em&gt;(at constant price)&lt;/em&gt; dipped to -6.0 percent in 2020-21 &lt;em&gt;(1st RE)&lt;/em&gt; but bounced back to 7.91 percent in 2021-22 &lt;em&gt;(PE)&lt;/em&gt;. Please see table-2.&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Table 2: Provisional Estimates of National Income and Expenditure Components of GDP, various years (at 2011- 12 Prices)&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Table%202%20Provisional%20Estimates%20of%20National%20Income%20and%20Expenditure%20Components%20of%20GDP%20various%20years%20at%202011-12%20Prices.png&quot; style=&quot;height:523px; width:1050px&quot; /&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source:&lt;/strong&gt; &lt;strong&gt;**&lt;/strong&gt; Press Note on Provisional Estimates of Annual National Income 2021-22 and Quarterly Estimates of Gross Domestic Product for the Fourth Quarter (Q4) of 2021-22, released on 31 May 2022, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;#&lt;/strong&gt; Press Note on First Advance Estimates of National Income 2020-21, released on 7 January, 2021, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;## &lt;/strong&gt;Press Note on First Advance Estimates of National Income 2019-20, released on 7 January, 2020, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;#* &lt;/strong&gt;Press Note on First Advance Estimates of National Income 2018-19, released on 7 January, 2019, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;^* &lt;/strong&gt;Press Note on First Advance Estimates of National Income 2017-18, released on 5 January, 2018, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;^^ &lt;/strong&gt;Press Note on Provisional Estimates of National Income 2016-17, released on 31 May, 2017, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1aiEDfCYkTynV-ucq46fwJKffZosApMMk/edit?usp=sharing&amp;amp;ouid=112233925171588304692&amp;amp;rtpof=true&amp;amp;sd=true&quot; title=&quot;https://docs.google.com/spreadsheets/d/1aiEDfCYkTynV-ucq46fwJKffZosApMMk/edit?usp=sharing&amp;amp;ouid=112233925171588304692&amp;amp;rtpof=true&amp;amp;sd=true&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;As compared to the 3-year average of the PFCE &lt;em&gt;(at constant prices)&lt;/em&gt; pertaining to 2017-18, 2018-19, and 2019-20 &lt;em&gt;(2nd RE)&lt;/em&gt;, the real PFCE in 2020-21 &lt;em&gt;(1st RE)&lt;/em&gt; and 2021-22 &lt;em&gt;(PE)&lt;/em&gt; grew by -1.25 percent and 6.56 percent, respectively. The advance estimates of GDP &lt;em&gt;(at 2011-12 prices) &lt;/em&gt;for 2022-23 would be released in January next year. Till then, we will have to wait for commenting further about the sustained growth of consumer demand. &lt;a href=&quot;https://www.mse.ac.in/wp-content/uploads/2020/02/Ind-exp.-dec-13-Mind-the-statistics-gap.pdf&quot; title=&quot;https://www.mse.ac.in/wp-content/uploads/2020/02/Ind-exp.-dec-13-Mind-the-statistics-gap.pdf&quot;&gt;Experts have suggested&lt;/a&gt; that in order to gauge consumer demand and income poverty, consumption expenditure survey of households by the National Statistical Office (NSO) needs to be done and the results are required to be published along with the release of&amp;nbsp;unit-level data. It is worth noting that the &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;gap between the National Accounts Statistics (NAS)&lt;/a&gt; &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;estimates of PFCE&lt;/a&gt; and the &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;National Sample Survey (NSS)&lt;/a&gt; &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;estimates of household consumption expenditure&lt;/a&gt;&amp;nbsp;&lt;em&gt;(aggregated at the national level)&lt;/em&gt; has grown progressively over the years.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;An alternative perspective&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;As said earlier, the y-o-y growth of GDP at constant prices during Q1 of 2022-23 was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot; title=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;13.5 percent&lt;/a&gt;, whereas the y-o-y growth of GDP at current prices during the same period was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot; title=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;26.7 percent&lt;/a&gt;. It means that the GDP deflator grew y-o-y by 13.2 percent.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Likewise, the y-o-y growth of real Gross Value Added (GVA) at basic prices during Q1 of 2022-23 was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot; title=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;12.7 percent&lt;/a&gt;, whereas the y-o-y growth of GVA at basic prices at current prices during the same period was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot; title=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;26.5 percent&lt;/a&gt;. So, the GVA deflator grew y-o-y by 13.8 percent.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;In order to arrive at GDP at constant prices from GDP at current prices, one needs a deflator. In the case of &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot; title=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;single deflation method&lt;/a&gt;, a common price deflator is utilised to adjust both input and output prices. For &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot; title=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;double deflation method&lt;/a&gt;, one needs two different deflators for adjusting input and output prices. In India, double deflation is done for agriculture, and mining and quarrying, whereas single deflation is used for other sectors. Thus, in &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot; title=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;our country, a mix&lt;/a&gt; of single and double deflation methods is used. &amp;nbsp;&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;A &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot; title=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;recent analysis&lt;/a&gt; by Pragya Srivastava, published in Livemint.com, tells us that the GDP deflator on an average reflects 70 percent of the Wholesale Price Index (WPI) and 30 percent of the Consumer Price Index (CPI). As per HSBC Global Research, input prices &lt;em&gt;(reflected by WPI rise) &lt;/em&gt;in the Q1 of 2022-23 have grown faster than the output prices &lt;em&gt;(indicated by the CPI increase)&lt;/em&gt;, possibly leading to an underestimation of GVA growth, and therefore GDP growth. Remember, &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot; title=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;GDP at market prices&lt;/a&gt; is derived as the &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot; title=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;sum of the GVA at basic prices&lt;/a&gt;, &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot; title=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;plus all taxes on products&lt;/a&gt;, &lt;a href=&quot;https://pib.gov.in/PressReleasePage.aspx?PRID=1723153&quot; title=&quot;https://pib.gov.in/PressReleasePage.aspx?PRID=1723153&quot;&gt;less all subsidies on products&lt;/a&gt;. In the case of single deflation method, if input &lt;em&gt;(indicated by WPI) &lt;/em&gt;and output &lt;em&gt;(reflected by CPI)&lt;/em&gt; prices expand at different rates, then it may cause overestimation or underestimation of economic performance.&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;A technical discussion by Jyoti Sharma &lt;em&gt;(please click &lt;a href=&quot;https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html&quot; title=&quot;https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html&quot;&gt;here&lt;/a&gt; and &lt;a href=&quot;https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html&quot; title=&quot;https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html&quot;&gt;here&lt;/a&gt; to access)&lt;/em&gt; informs us that ideally, the GDP deflator of the MoSPI lies in the range {min. (CPI, WPI), max. (CPI, WPI)} i.e., the deflator must fall in the range defined by minimum of CPI and WPI and maximum of CPI and WPI for a sector. She proposes that in the case of double deflation method, CPI as a deflator for output value, and WPI for input value should be used. Instead of going for mix method, which India uses, one should go for either single or double deflation method across the sectors and sub-sectors in order to compare the trends across sectors.&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;&lt;em&gt;References:&amp;nbsp;&lt;/em&gt;&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2022-23, released on 31 August, 2022, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2021-22, released on 31 August, 2021, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2021-22.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2021-22.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2020-21, released on 31 August, 2020, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2019-20, released on 30 August, 2019, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2019-20.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2019-20.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Vahan registration website,&amp;nbsp;Ministry of Road Transport and Highways,&amp;nbsp;please &lt;a href=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot; title=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Provisional Estimates of Annual National Income 2021-22 and Quarterly Estimates of Gross Domestic Product for the Fourth Quarter (Q4) of 2021-22, released on 31 May 2022, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2020-21, released on 7 January, 2021, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2019-20, released on 7 January, 2020, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2018-19, released on 7 January, 2019, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2017-18, released on 5 January, 2018, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Provisional Estimates of National Income 2016-17, released on 31 May, 2017, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press release: Provisional estimates of Annual National Income, 2020-21 and Quarterly estimates (Q4) of Gross Domestic Product, 2020-21, Ministry of Statistics &amp;amp; Programme Implementation, Press Information Bureau, released on 31 May, 2021, please click &lt;a href=&quot;https://pib.gov.in/PressReleasePage.aspx?PRID=1723153&quot; title=&quot;https://pib.gov.in/PressReleasePage.aspx?PRID=1723153&quot;&gt;here&lt;/a&gt; and &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot; title=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;here&lt;/a&gt; to access &amp;nbsp;&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Estimates of Food Consumption Expenditure from Household Surveys and National Accounts -AC Kulshreshtha and Aloke Kar, Central Statistical Organisation (CSO), please &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Is the GDP number an underestimate? -Pragya Srivastava, Livemint.com, 2 September, 2022, please &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot; title=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;click here&lt;/a&gt; to access&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;The Real Story Behind India&amp;rsquo;s Two Wheeler Sales or Rather the Lack of It -Vivek Kaul, 19 November, 2020, please &lt;a href=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot; title=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Mind the statistics gap -C Rangarajan and S Mahendra Dev, The Indian Express, 13 December, 2019, please &lt;a href=&quot;https://bit.ly/3Dsq9y2&quot; title=&quot;https://bit.ly/3Dsq9y2&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;India&amp;rsquo;s GDP: Deflating the right way -Jyoti Sharma, Ideas for India, 12 October, 2017, please &lt;a href=&quot;https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html&quot; title=&quot;https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html&quot;&gt;click here&lt;/a&gt; to access&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;India&amp;rsquo;s GDP: Deflating the right way -Jyoti Sharma, Livemint.com, 12 October, 2017, please &lt;a href=&quot;https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html&quot; title=&quot;https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html&quot;&gt;click here&lt;/a&gt; to access&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Image Courtesy: Inclusive Media for Change/ Shambhu Ghatak&lt;/strong&gt;&lt;/p&gt;&#039;,
	&#039;lang&#039; =&gt; &#039;English&#039;,
	&#039;SITE_URL&#039; =&gt; &#039;https://im4change.in/&#039;,
	&#039;site_title&#039; =&gt; &#039;im4change&#039;,
	&#039;adminprix&#039; =&gt; &#039;admin&#039;
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$article_current = object(App\Model\Entity\Article) {

	&#039;id&#039; =&gt; (int) 63693,
	&#039;title&#039; =&gt; &#039;Realistic analysis shows that the Indian economy has simply taken little steps in Q1 instead of a quantum leap&#039;,
	&#039;subheading&#039; =&gt; null,
	&#039;description&#039; =&gt; &#039;&lt;p style=&quot;text-align:justify&quot;&gt;There is euphoria abound about India&amp;#39;s growth performance during the first quarter of the current fiscal. As compared to the corresponding period last year, the year-on-year (y-o-y) GDP growth in the first quarter (Q1) of 2022-23 is down. However, one should take into account the fact that the high growth performance of the real GDP in Q1 of 2021-22 was due to the low base in the corresponding period of the first pandemic year. The optimism surrounding y-o-y&amp;nbsp;real GDP growth in the first quarter this year therefore appears to be natural.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;On further delving into the data, it can be discovered that after two years of the pandemic, the GDP in the Q1 of the current fiscal, crossed the GDP figure corresponding to the Q1 of 2019-20. Please see chart-1.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Chart%201%20Quarterly%20Estimates%20of%20Expenditure%20Components%20of%20GDP%20for%20Q1%20at%202011-12%20Prices%20in%20Rs.%20Crore%281%29.png&quot; style=&quot;height:687px; width:997px&quot; /&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source: **&lt;/strong&gt; Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2022-23, released on 31 August, 2022, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;*&lt;/strong&gt; Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2021-22, released on 31 August, 2021, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2021-22.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;##&lt;/strong&gt; Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2020-21, released on 31 August, 2020, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;# &lt;/strong&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2019-20, released on 30 August, 2019, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2019-20.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;
&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Growth in the real GDP is vital because it provides the government with additional revenue to spend. When the economy expands, it signifies that the economic activities are reaching the level as they existed during the normal times i.e., before the pandemic had struck. With the return of the economy to normalcy, employment generation is expected to take place. Employment creation can lead to a resurgence in effective demand i.e., purchasing power.&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Measuring real GDP growth after 2 years of the pandemic&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;The GDP at constant prices expanded by &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022.pdf&quot;&gt;4.1 percent in the last quarter (Q4)&lt;/a&gt; of 2021-22. While the real economy grew y-o-y by 13.51 percent in the Q1 as compared to a y-o-y real GDP growth of 20.08 percent in the corresponding period last year, a different picture emerges when the base is shifted to Q1 GDP in the pre-covid times. As compared to the 3-year average of the Q1 GDP pertaining to 2017-18, 2018-19, and 2019-20, the real GDP in the first quarter of the current fiscal expanded by 9.58 percent i.e., less than the y-o-y growth of 13.51 percent. Please take a&amp;nbsp;look at table-1.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Table 1: Quarterly Estimates of Expenditure Components of GDP for Q1 (April-June) at 2011-12 Prices, various years (in Rs. Crore)&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Table%201%20Quarterly%20Estimates%20of%20Expenditure%20Components%20of%20GDP%20for%20Q1%20at%202011-12%20Prices%20in%20Rs.%20Crore.png&quot; style=&quot;height:309px; width:874px&quot; /&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source: &lt;/strong&gt;Same as chart-1&lt;br /&gt;
&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;
&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;As compared to the 3-year average of the GDP during the first quarter of 2017-18, 2018-19 and 2019-20, the real GDP in the corresponding period last year contracted by 3.46 percent. As opposed to that, the y-o-y GDP expansion was to the tune of 20.08 percent in Q1 of 2021-22. Thus, the real GDP growth changes with the change in base and also the base year.&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;All the high frequency indicators aren&amp;rsquo;t moving in the same direction&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;After the completion of the first quarter of the current fiscal, the Ministry of Statistics and Programme Implementation (MoSPI) has provided the first estimate of the Q1&amp;rsquo;s GDP. On the basis of about &lt;a href=&quot;/upload/files/High%20frequency%20indicators.png&quot;&gt;20 high frequency indicators&lt;/a&gt;, the sector-wise estimates have been compiled by the ministry. Out of the 20 indicators, in the case of &amp;#39;total telephone subscribers&amp;#39; &lt;em&gt;(-2.5 percent)&lt;/em&gt;, &amp;#39;cargo handled at airports&amp;#39; &lt;em&gt;(-1.7 percent)&lt;/em&gt;, and &amp;#39;Index of Industrial Production (IIP) pertaining to metallic minerals&amp;#39; &lt;em&gt;(-6.5 percent)&lt;/em&gt;, there has been y-o-y contractions in Q1 of 2022-23 as opposed to positive growths in the corresponding period last year. &amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;In the case of certain high frequency indicators like &amp;#39;production of cement&amp;#39;, &amp;#39;consumption of steel&amp;#39;, &amp;#39;sales of commercial vehicles&amp;#39;, &amp;#39;purchase of private vehicles&amp;#39;, &amp;#39;cargo handled at major sea ports&amp;#39;, &amp;#39;passengers handled at airports&amp;#39;, &amp;#39;IIP pertaining to mining and manufacturing&amp;#39;, &amp;#39;net tonne kilometer - railways&amp;#39;, etc., the y-o-y percentage growth has reduced between Q1 of 2021-22 and Q1 of 2022-23.&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Two-wheeler sale to the average Indian citizen still down&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Some economists tend to use the data on two-wheeler sale, which is provided by the industry body &lt;a href=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot;&gt;Society of Indian Automobile Manufacturers (SIAM)&lt;/a&gt;. However, the SIAM data is related to the number of units which is &lt;a href=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot;&gt;sold by the manufacturers to dealers&lt;/a&gt; across the country. During economic slowdown, dealers may be unable to sell the products they purchase from manufacturers, which could lead to building up of inventory with the former. Hence, the SIAM data may not capture the real situation i.e., the number of two-wheelers bought by the final consumers.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Chart%202%20Two%20wheeler%20vehicles%20registered%20in%20Q1%20of%20various%20years.png&quot; style=&quot;height:555px; width:780px&quot; /&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source: &lt;/strong&gt;Vahan registration website,&amp;nbsp;Ministry of Road Transport and Highways,&amp;nbsp;please &lt;a href=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;br /&gt;
&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;
&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Instead of using SIAM data on two-wheeler sale, the data&amp;nbsp;that is provided by &lt;a href=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot;&gt;Vahan dashboard&lt;/a&gt; on vehicle registration, is used in the present piece. As compared to the 3-year average of the number of two-wheelers &lt;em&gt;(sum of non-transport and transport-two-wheelers) &lt;/em&gt;registered during April-June of 2017, 2018 and 2019, the number of two-wheeler vehicles registered in the first quarters of 2020, 2021 and 2022 has been lower. In short, if the number of two-wheelers registered is used for analysis, then it shows that the purchasing power of the average Indian consumer has still not reached the pre-pandemic level.&amp;nbsp;Please have a look at chart-2.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Whatever happened to consumer demand?&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;The Private Final Consumption Expenditure (PFCE) &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;represents the value of goods and services&lt;/a&gt; &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;consumed by the households&lt;/a&gt; and &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;the private non-profit institutions&lt;/a&gt; &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;serving households (NPISHs)&lt;/a&gt; in the period extending from the beginning of April of one calendar year to the end of March of the next. In 2021-22 &lt;em&gt;(provisional estimates)&lt;/em&gt;, PFCE&amp;nbsp;i.e., final consumer spending &lt;em&gt;(at 2011-12 prices) &lt;/em&gt;as a proportion of GDP &lt;em&gt;(at 2011-12 prices) &lt;/em&gt;was 56.85 percent. Therefore, the revival of consumer demand is essential for boosting economic growth. The y-o-y growth rates of PFCE &lt;em&gt;(at constant prices) &lt;/em&gt;were 8.88 percent in 2017-18, 6.61 percent in 2018-19, and 4.45 percent in 2019-20 &lt;em&gt;(2nd revised estimates)&lt;/em&gt;. However, the y-o-y growth rates of PFCE &lt;em&gt;(at constant price)&lt;/em&gt; dipped to -6.0 percent in 2020-21 &lt;em&gt;(1st RE)&lt;/em&gt; but bounced back to 7.91 percent in 2021-22 &lt;em&gt;(PE)&lt;/em&gt;. Please see table-2.&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Table 2: Provisional Estimates of National Income and Expenditure Components of GDP, various years (at 2011- 12 Prices)&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Table%202%20Provisional%20Estimates%20of%20National%20Income%20and%20Expenditure%20Components%20of%20GDP%20various%20years%20at%202011-12%20Prices.png&quot; style=&quot;height:523px; width:1050px&quot; /&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source:&lt;/strong&gt; &lt;strong&gt;**&lt;/strong&gt; Press Note on Provisional Estimates of Annual National Income 2021-22 and Quarterly Estimates of Gross Domestic Product for the Fourth Quarter (Q4) of 2021-22, released on 31 May 2022, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;#&lt;/strong&gt; Press Note on First Advance Estimates of National Income 2020-21, released on 7 January, 2021, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;## &lt;/strong&gt;Press Note on First Advance Estimates of National Income 2019-20, released on 7 January, 2020, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;#* &lt;/strong&gt;Press Note on First Advance Estimates of National Income 2018-19, released on 7 January, 2019, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;^* &lt;/strong&gt;Press Note on First Advance Estimates of National Income 2017-18, released on 5 January, 2018, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;^^ &lt;/strong&gt;Press Note on Provisional Estimates of National Income 2016-17, released on 31 May, 2017, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1aiEDfCYkTynV-ucq46fwJKffZosApMMk/edit?usp=sharing&amp;amp;ouid=112233925171588304692&amp;amp;rtpof=true&amp;amp;sd=true&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;
&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;As compared to the 3-year average of the PFCE &lt;em&gt;(at constant prices)&lt;/em&gt; pertaining to 2017-18, 2018-19, and 2019-20 &lt;em&gt;(2nd RE)&lt;/em&gt;, the real PFCE in 2020-21 &lt;em&gt;(1st RE)&lt;/em&gt; and 2021-22 &lt;em&gt;(PE)&lt;/em&gt; grew by -1.25 percent and 6.56 percent, respectively. The advance estimates of GDP &lt;em&gt;(at 2011-12 prices) &lt;/em&gt;for 2022-23 would be released in January next year. Till then, we will have to wait for commenting further about the sustained growth of consumer demand. &lt;a href=&quot;https://www.mse.ac.in/wp-content/uploads/2020/02/Ind-exp.-dec-13-Mind-the-statistics-gap.pdf&quot;&gt;Experts have suggested&lt;/a&gt; that in order to gauge consumer demand and income poverty, consumption expenditure survey of households by the National Statistical Office (NSO) needs to be done and the results are required to be published along with the release of&amp;nbsp;unit-level data. It is worth noting that the &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;gap between the National Accounts Statistics (NAS)&lt;/a&gt; &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;estimates of PFCE&lt;/a&gt; and the &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;National Sample Survey (NSS)&lt;/a&gt; &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;estimates of household consumption expenditure&lt;/a&gt;&amp;nbsp;&lt;em&gt;(aggregated at the national level)&lt;/em&gt; has grown progressively over the years.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;An alternative perspective&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;As said earlier, the y-o-y growth of GDP at constant prices during Q1 of 2022-23 was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;13.5 percent&lt;/a&gt;, whereas the y-o-y growth of GDP at current prices during the same period was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;26.7 percent&lt;/a&gt;. It means that the GDP deflator grew y-o-y by 13.2 percent.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Likewise, the y-o-y growth of real Gross Value Added (GVA) at basic prices during Q1 of 2022-23 was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;12.7 percent&lt;/a&gt;, whereas the y-o-y growth of GVA at basic prices at current prices during the same period was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;26.5 percent&lt;/a&gt;. So, the GVA deflator grew y-o-y by 13.8 percent.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;In order to arrive at GDP at constant prices from GDP at current prices, one needs a deflator. In the case of &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;single deflation method&lt;/a&gt;, a common price deflator is utilised to adjust both input and output prices. For &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;double deflation method&lt;/a&gt;, one needs two different deflators for adjusting input and output prices. In India, double deflation is done for agriculture, and mining and quarrying, whereas single deflation is used for other sectors. Thus, in &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;our country, a mix&lt;/a&gt; of single and double deflation methods is used. &amp;nbsp;&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;A &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;recent analysis&lt;/a&gt; by Pragya Srivastava, published in Livemint.com, tells us that the GDP deflator on an average reflects 70 percent of the Wholesale Price Index (WPI) and 30 percent of the Consumer Price Index (CPI). As per HSBC Global Research, input prices &lt;em&gt;(reflected by WPI rise) &lt;/em&gt;in the Q1 of 2022-23 have grown faster than the output prices &lt;em&gt;(indicated by the CPI increase)&lt;/em&gt;, possibly leading to an underestimation of GVA growth, and therefore GDP growth. Remember, &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;GDP at market prices&lt;/a&gt; is derived as the &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;sum of the GVA at basic prices&lt;/a&gt;, &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;plus all taxes on products&lt;/a&gt;, &lt;a href=&quot;https://pib.gov.in/PressReleasePage.aspx?PRID=1723153&quot;&gt;less all subsidies on products&lt;/a&gt;. In the case of single deflation method, if input &lt;em&gt;(indicated by WPI) &lt;/em&gt;and output &lt;em&gt;(reflected by CPI)&lt;/em&gt; prices expand at different rates, then it may cause overestimation or underestimation of economic performance.&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;A technical discussion by Jyoti Sharma &lt;em&gt;(please click &lt;a href=&quot;https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html&quot;&gt;here&lt;/a&gt; and &lt;a href=&quot;https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html&quot;&gt;here&lt;/a&gt; to access)&lt;/em&gt; informs us that ideally, the GDP deflator of the MoSPI lies in the range {min. (CPI, WPI), max. (CPI, WPI)} i.e., the deflator must fall in the range defined by minimum of CPI and WPI and maximum of CPI and WPI for a sector. She proposes that in the case of double deflation method, CPI as a deflator for output value, and WPI for input value should be used. Instead of going for mix method, which India uses, one should go for either single or double deflation method across the sectors and sub-sectors in order to compare the trends across sectors.&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;&lt;em&gt;References:&amp;nbsp;&lt;/em&gt;&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2022-23, released on 31 August, 2022, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2021-22, released on 31 August, 2021, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2021-22.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2020-21, released on 31 August, 2020, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2019-20, released on 30 August, 2019, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2019-20.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Vahan registration website,&amp;nbsp;Ministry of Road Transport and Highways,&amp;nbsp;please &lt;a href=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Provisional Estimates of Annual National Income 2021-22 and Quarterly Estimates of Gross Domestic Product for the Fourth Quarter (Q4) of 2021-22, released on 31 May 2022, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2020-21, released on 7 January, 2021, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2019-20, released on 7 January, 2020, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2018-19, released on 7 January, 2019, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2017-18, released on 5 January, 2018, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Provisional Estimates of National Income 2016-17, released on 31 May, 2017, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press release: Provisional estimates of Annual National Income, 2020-21 and Quarterly estimates (Q4) of Gross Domestic Product, 2020-21, Ministry of Statistics &amp;amp; Programme Implementation, Press Information Bureau, released on 31 May, 2021, please click &lt;a href=&quot;https://pib.gov.in/PressReleasePage.aspx?PRID=1723153&quot;&gt;here&lt;/a&gt; and &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;here&lt;/a&gt; to access &amp;nbsp;&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Estimates of Food Consumption Expenditure from Household Surveys and National Accounts -AC Kulshreshtha and Aloke Kar, Central Statistical Organisation (CSO), please &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Is the GDP number an underestimate? -Pragya Srivastava, Livemint.com, 2 September, 2022, please &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html &quot;&gt;click here&lt;/a&gt; to access&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;The Real Story Behind India&amp;rsquo;s Two Wheeler Sales or Rather the Lack of It -Vivek Kaul, 19 November, 2020, please &lt;a href=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Mind the statistics gap -C Rangarajan and S Mahendra Dev, The Indian Express, 13 December, 2019, please &lt;a href=&quot;https://bit.ly/3Dsq9y2&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;India&amp;rsquo;s GDP: Deflating the right way -Jyoti Sharma, Ideas for India, 12 October, 2017, please &lt;a href=&quot;https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html&quot;&gt;click here&lt;/a&gt; to access&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;India&amp;rsquo;s GDP: Deflating the right way -Jyoti Sharma, Livemint.com, 12 October, 2017, please &lt;a href=&quot;https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html &quot;&gt;click here&lt;/a&gt; to access&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Image Courtesy: Inclusive Media for Change/ Shambhu Ghatak&lt;/strong&gt;&lt;/p&gt;
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$metaTitle = &#039;NEWS ALERTS | Realistic analysis shows that the Indian economy has simply taken little steps in Q1 instead of a quantum leap&#039;
$metaKeywords = &#039;Consumer Price Index,CPI,GDP at 2011-12 prices,GDP at constant prices,GDP at current prices,GDP deflation,Gross Value Added,GVA at basic prices,Real GDP growth,Wholesale Price Index,WPI&#039;
$metaDesc = &#039;There is euphoria abound about India&amp;#39;s growth performance during the first quarter of the current fiscal. As compared to the corresponding period last year, the year-on-year (y-o-y) GDP growth in the first quarter (Q1) of 2022-23 is down. However, one...&#039;
$disp = &#039;&lt;p style=&quot;text-align:justify&quot;&gt;There is euphoria abound about India&amp;#39;s growth performance during the first quarter of the current fiscal. As compared to the corresponding period last year, the year-on-year (y-o-y) GDP growth in the first quarter (Q1) of 2022-23 is down. However, one should take into account the fact that the high growth performance of the real GDP in Q1 of 2021-22 was due to the low base in the corresponding period of the first pandemic year. The optimism surrounding y-o-y&amp;nbsp;real GDP growth in the first quarter this year therefore appears to be natural.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;On further delving into the data, it can be discovered that after two years of the pandemic, the GDP in the Q1 of the current fiscal, crossed the GDP figure corresponding to the Q1 of 2019-20. Please see chart-1.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Chart%201%20Quarterly%20Estimates%20of%20Expenditure%20Components%20of%20GDP%20for%20Q1%20at%202011-12%20Prices%20in%20Rs.%20Crore%281%29.png&quot; style=&quot;height:687px; width:997px&quot; /&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source: **&lt;/strong&gt; Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2022-23, released on 31 August, 2022, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;*&lt;/strong&gt; Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2021-22, released on 31 August, 2021, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2021-22.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2021-22.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;##&lt;/strong&gt; Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2020-21, released on 31 August, 2020, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;# &lt;/strong&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2019-20, released on 30 August, 2019, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2019-20.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2019-20.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot; title=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Growth in the real GDP is vital because it provides the government with additional revenue to spend. When the economy expands, it signifies that the economic activities are reaching the level as they existed during the normal times i.e., before the pandemic had struck. With the return of the economy to normalcy, employment generation is expected to take place. Employment creation can lead to a resurgence in effective demand i.e., purchasing power.&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Measuring real GDP growth after 2 years of the pandemic&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;The GDP at constant prices expanded by &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022.pdf&quot;&gt;4.1 percent in the last quarter (Q4)&lt;/a&gt; of 2021-22. While the real economy grew y-o-y by 13.51 percent in the Q1 as compared to a y-o-y real GDP growth of 20.08 percent in the corresponding period last year, a different picture emerges when the base is shifted to Q1 GDP in the pre-covid times. As compared to the 3-year average of the Q1 GDP pertaining to 2017-18, 2018-19, and 2019-20, the real GDP in the first quarter of the current fiscal expanded by 9.58 percent i.e., less than the y-o-y growth of 13.51 percent. Please take a&amp;nbsp;look at table-1.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Table 1: Quarterly Estimates of Expenditure Components of GDP for Q1 (April-June) at 2011-12 Prices, various years (in Rs. Crore)&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Table%201%20Quarterly%20Estimates%20of%20Expenditure%20Components%20of%20GDP%20for%20Q1%20at%202011-12%20Prices%20in%20Rs.%20Crore.png&quot; style=&quot;height:309px; width:874px&quot; /&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source: &lt;/strong&gt;Same as chart-1&lt;br /&gt;&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot; title=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;As compared to the 3-year average of the GDP during the first quarter of 2017-18, 2018-19 and 2019-20, the real GDP in the corresponding period last year contracted by 3.46 percent. As opposed to that, the y-o-y GDP expansion was to the tune of 20.08 percent in Q1 of 2021-22. Thus, the real GDP growth changes with the change in base and also the base year.&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;All the high frequency indicators aren&amp;rsquo;t moving in the same direction&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;After the completion of the first quarter of the current fiscal, the Ministry of Statistics and Programme Implementation (MoSPI) has provided the first estimate of the Q1&amp;rsquo;s GDP. On the basis of about &lt;a href=&quot;/upload/files/High%20frequency%20indicators.png&quot; title=&quot;/upload/files/High%20frequency%20indicators.png&quot;&gt;20 high frequency indicators&lt;/a&gt;, the sector-wise estimates have been compiled by the ministry. Out of the 20 indicators, in the case of &amp;#39;total telephone subscribers&amp;#39; &lt;em&gt;(-2.5 percent)&lt;/em&gt;, &amp;#39;cargo handled at airports&amp;#39; &lt;em&gt;(-1.7 percent)&lt;/em&gt;, and &amp;#39;Index of Industrial Production (IIP) pertaining to metallic minerals&amp;#39; &lt;em&gt;(-6.5 percent)&lt;/em&gt;, there has been y-o-y contractions in Q1 of 2022-23 as opposed to positive growths in the corresponding period last year. &amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;In the case of certain high frequency indicators like &amp;#39;production of cement&amp;#39;, &amp;#39;consumption of steel&amp;#39;, &amp;#39;sales of commercial vehicles&amp;#39;, &amp;#39;purchase of private vehicles&amp;#39;, &amp;#39;cargo handled at major sea ports&amp;#39;, &amp;#39;passengers handled at airports&amp;#39;, &amp;#39;IIP pertaining to mining and manufacturing&amp;#39;, &amp;#39;net tonne kilometer - railways&amp;#39;, etc., the y-o-y percentage growth has reduced between Q1 of 2021-22 and Q1 of 2022-23.&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Two-wheeler sale to the average Indian citizen still down&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Some economists tend to use the data on two-wheeler sale, which is provided by the industry body &lt;a href=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot; title=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot;&gt;Society of Indian Automobile Manufacturers (SIAM)&lt;/a&gt;. However, the SIAM data is related to the number of units which is &lt;a href=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot; title=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot;&gt;sold by the manufacturers to dealers&lt;/a&gt; across the country. During economic slowdown, dealers may be unable to sell the products they purchase from manufacturers, which could lead to building up of inventory with the former. Hence, the SIAM data may not capture the real situation i.e., the number of two-wheelers bought by the final consumers.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Chart%202%20Two%20wheeler%20vehicles%20registered%20in%20Q1%20of%20various%20years.png&quot; style=&quot;height:555px; width:780px&quot; /&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source: &lt;/strong&gt;Vahan registration website,&amp;nbsp;Ministry of Road Transport and Highways,&amp;nbsp;please &lt;a href=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot; title=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;br /&gt;&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot; title=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Instead of using SIAM data on two-wheeler sale, the data&amp;nbsp;that is provided by &lt;a href=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot; title=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot;&gt;Vahan dashboard&lt;/a&gt; on vehicle registration, is used in the present piece. As compared to the 3-year average of the number of two-wheelers &lt;em&gt;(sum of non-transport and transport-two-wheelers) &lt;/em&gt;registered during April-June of 2017, 2018 and 2019, the number of two-wheeler vehicles registered in the first quarters of 2020, 2021 and 2022 has been lower. In short, if the number of two-wheelers registered is used for analysis, then it shows that the purchasing power of the average Indian consumer has still not reached the pre-pandemic level.&amp;nbsp;Please have a look at chart-2.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Whatever happened to consumer demand?&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;The Private Final Consumption Expenditure (PFCE) &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;represents the value of goods and services&lt;/a&gt; &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;consumed by the households&lt;/a&gt; and &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;the private non-profit institutions&lt;/a&gt; &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;serving households (NPISHs)&lt;/a&gt; in the period extending from the beginning of April of one calendar year to the end of March of the next. In 2021-22 &lt;em&gt;(provisional estimates)&lt;/em&gt;, PFCE&amp;nbsp;i.e., final consumer spending &lt;em&gt;(at 2011-12 prices) &lt;/em&gt;as a proportion of GDP &lt;em&gt;(at 2011-12 prices) &lt;/em&gt;was 56.85 percent. Therefore, the revival of consumer demand is essential for boosting economic growth. The y-o-y growth rates of PFCE &lt;em&gt;(at constant prices) &lt;/em&gt;were 8.88 percent in 2017-18, 6.61 percent in 2018-19, and 4.45 percent in 2019-20 &lt;em&gt;(2nd revised estimates)&lt;/em&gt;. However, the y-o-y growth rates of PFCE &lt;em&gt;(at constant price)&lt;/em&gt; dipped to -6.0 percent in 2020-21 &lt;em&gt;(1st RE)&lt;/em&gt; but bounced back to 7.91 percent in 2021-22 &lt;em&gt;(PE)&lt;/em&gt;. Please see table-2.&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Table 2: Provisional Estimates of National Income and Expenditure Components of GDP, various years (at 2011- 12 Prices)&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Table%202%20Provisional%20Estimates%20of%20National%20Income%20and%20Expenditure%20Components%20of%20GDP%20various%20years%20at%202011-12%20Prices.png&quot; style=&quot;height:523px; width:1050px&quot; /&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source:&lt;/strong&gt; &lt;strong&gt;**&lt;/strong&gt; Press Note on Provisional Estimates of Annual National Income 2021-22 and Quarterly Estimates of Gross Domestic Product for the Fourth Quarter (Q4) of 2021-22, released on 31 May 2022, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;#&lt;/strong&gt; Press Note on First Advance Estimates of National Income 2020-21, released on 7 January, 2021, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;## &lt;/strong&gt;Press Note on First Advance Estimates of National Income 2019-20, released on 7 January, 2020, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;#* &lt;/strong&gt;Press Note on First Advance Estimates of National Income 2018-19, released on 7 January, 2019, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;^* &lt;/strong&gt;Press Note on First Advance Estimates of National Income 2017-18, released on 5 January, 2018, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;^^ &lt;/strong&gt;Press Note on Provisional Estimates of National Income 2016-17, released on 31 May, 2017, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1aiEDfCYkTynV-ucq46fwJKffZosApMMk/edit?usp=sharing&amp;amp;ouid=112233925171588304692&amp;amp;rtpof=true&amp;amp;sd=true&quot; title=&quot;https://docs.google.com/spreadsheets/d/1aiEDfCYkTynV-ucq46fwJKffZosApMMk/edit?usp=sharing&amp;amp;ouid=112233925171588304692&amp;amp;rtpof=true&amp;amp;sd=true&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;As compared to the 3-year average of the PFCE &lt;em&gt;(at constant prices)&lt;/em&gt; pertaining to 2017-18, 2018-19, and 2019-20 &lt;em&gt;(2nd RE)&lt;/em&gt;, the real PFCE in 2020-21 &lt;em&gt;(1st RE)&lt;/em&gt; and 2021-22 &lt;em&gt;(PE)&lt;/em&gt; grew by -1.25 percent and 6.56 percent, respectively. The advance estimates of GDP &lt;em&gt;(at 2011-12 prices) &lt;/em&gt;for 2022-23 would be released in January next year. Till then, we will have to wait for commenting further about the sustained growth of consumer demand. &lt;a href=&quot;https://www.mse.ac.in/wp-content/uploads/2020/02/Ind-exp.-dec-13-Mind-the-statistics-gap.pdf&quot; title=&quot;https://www.mse.ac.in/wp-content/uploads/2020/02/Ind-exp.-dec-13-Mind-the-statistics-gap.pdf&quot;&gt;Experts have suggested&lt;/a&gt; that in order to gauge consumer demand and income poverty, consumption expenditure survey of households by the National Statistical Office (NSO) needs to be done and the results are required to be published along with the release of&amp;nbsp;unit-level data. It is worth noting that the &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;gap between the National Accounts Statistics (NAS)&lt;/a&gt; &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;estimates of PFCE&lt;/a&gt; and the &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;National Sample Survey (NSS)&lt;/a&gt; &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;estimates of household consumption expenditure&lt;/a&gt;&amp;nbsp;&lt;em&gt;(aggregated at the national level)&lt;/em&gt; has grown progressively over the years.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;An alternative perspective&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;As said earlier, the y-o-y growth of GDP at constant prices during Q1 of 2022-23 was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot; title=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;13.5 percent&lt;/a&gt;, whereas the y-o-y growth of GDP at current prices during the same period was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot; title=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;26.7 percent&lt;/a&gt;. It means that the GDP deflator grew y-o-y by 13.2 percent.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Likewise, the y-o-y growth of real Gross Value Added (GVA) at basic prices during Q1 of 2022-23 was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot; title=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;12.7 percent&lt;/a&gt;, whereas the y-o-y growth of GVA at basic prices at current prices during the same period was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot; title=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;26.5 percent&lt;/a&gt;. So, the GVA deflator grew y-o-y by 13.8 percent.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;In order to arrive at GDP at constant prices from GDP at current prices, one needs a deflator. In the case of &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot; title=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;single deflation method&lt;/a&gt;, a common price deflator is utilised to adjust both input and output prices. For &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot; title=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;double deflation method&lt;/a&gt;, one needs two different deflators for adjusting input and output prices. In India, double deflation is done for agriculture, and mining and quarrying, whereas single deflation is used for other sectors. Thus, in &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot; title=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;our country, a mix&lt;/a&gt; of single and double deflation methods is used. &amp;nbsp;&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;A &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot; title=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;recent analysis&lt;/a&gt; by Pragya Srivastava, published in Livemint.com, tells us that the GDP deflator on an average reflects 70 percent of the Wholesale Price Index (WPI) and 30 percent of the Consumer Price Index (CPI). As per HSBC Global Research, input prices &lt;em&gt;(reflected by WPI rise) &lt;/em&gt;in the Q1 of 2022-23 have grown faster than the output prices &lt;em&gt;(indicated by the CPI increase)&lt;/em&gt;, possibly leading to an underestimation of GVA growth, and therefore GDP growth. Remember, &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot; title=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;GDP at market prices&lt;/a&gt; is derived as the &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot; title=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;sum of the GVA at basic prices&lt;/a&gt;, &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot; title=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;plus all taxes on products&lt;/a&gt;, &lt;a href=&quot;https://pib.gov.in/PressReleasePage.aspx?PRID=1723153&quot; title=&quot;https://pib.gov.in/PressReleasePage.aspx?PRID=1723153&quot;&gt;less all subsidies on products&lt;/a&gt;. In the case of single deflation method, if input &lt;em&gt;(indicated by WPI) &lt;/em&gt;and output &lt;em&gt;(reflected by CPI)&lt;/em&gt; prices expand at different rates, then it may cause overestimation or underestimation of economic performance.&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;A technical discussion by Jyoti Sharma &lt;em&gt;(please click &lt;a href=&quot;https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html&quot; title=&quot;https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html&quot;&gt;here&lt;/a&gt; and &lt;a href=&quot;https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html&quot; title=&quot;https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html&quot;&gt;here&lt;/a&gt; to access)&lt;/em&gt; informs us that ideally, the GDP deflator of the MoSPI lies in the range {min. (CPI, WPI), max. (CPI, WPI)} i.e., the deflator must fall in the range defined by minimum of CPI and WPI and maximum of CPI and WPI for a sector. She proposes that in the case of double deflation method, CPI as a deflator for output value, and WPI for input value should be used. Instead of going for mix method, which India uses, one should go for either single or double deflation method across the sectors and sub-sectors in order to compare the trends across sectors.&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;&lt;em&gt;References:&amp;nbsp;&lt;/em&gt;&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2022-23, released on 31 August, 2022, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2021-22, released on 31 August, 2021, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2021-22.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2021-22.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2020-21, released on 31 August, 2020, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2019-20, released on 30 August, 2019, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2019-20.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2019-20.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Vahan registration website,&amp;nbsp;Ministry of Road Transport and Highways,&amp;nbsp;please &lt;a href=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot; title=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Provisional Estimates of Annual National Income 2021-22 and Quarterly Estimates of Gross Domestic Product for the Fourth Quarter (Q4) of 2021-22, released on 31 May 2022, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2020-21, released on 7 January, 2021, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2019-20, released on 7 January, 2020, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2018-19, released on 7 January, 2019, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2017-18, released on 5 January, 2018, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Provisional Estimates of National Income 2016-17, released on 31 May, 2017, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press release: Provisional estimates of Annual National Income, 2020-21 and Quarterly estimates (Q4) of Gross Domestic Product, 2020-21, Ministry of Statistics &amp;amp; Programme Implementation, Press Information Bureau, released on 31 May, 2021, please click &lt;a href=&quot;https://pib.gov.in/PressReleasePage.aspx?PRID=1723153&quot; title=&quot;https://pib.gov.in/PressReleasePage.aspx?PRID=1723153&quot;&gt;here&lt;/a&gt; and &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot; title=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;here&lt;/a&gt; to access &amp;nbsp;&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Estimates of Food Consumption Expenditure from Household Surveys and National Accounts -AC Kulshreshtha and Aloke Kar, Central Statistical Organisation (CSO), please &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Is the GDP number an underestimate? -Pragya Srivastava, Livemint.com, 2 September, 2022, please &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot; title=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;click here&lt;/a&gt; to access&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;The Real Story Behind India&amp;rsquo;s Two Wheeler Sales or Rather the Lack of It -Vivek Kaul, 19 November, 2020, please &lt;a href=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot; title=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Mind the statistics gap -C Rangarajan and S Mahendra Dev, The Indian Express, 13 December, 2019, please &lt;a href=&quot;https://bit.ly/3Dsq9y2&quot; title=&quot;https://bit.ly/3Dsq9y2&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;India&amp;rsquo;s GDP: Deflating the right way -Jyoti Sharma, Ideas for India, 12 October, 2017, please &lt;a href=&quot;https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html&quot; title=&quot;https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html&quot;&gt;click here&lt;/a&gt; to access&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;India&amp;rsquo;s GDP: Deflating the right way -Jyoti Sharma, Livemint.com, 12 October, 2017, please &lt;a href=&quot;https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html&quot; title=&quot;https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html&quot;&gt;click here&lt;/a&gt; to access&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Image Courtesy: Inclusive Media for Change/ Shambhu Ghatak&lt;/strong&gt;&lt;/p&gt;&#039;
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                <strong>Realistic analysis shows that the Indian economy has simply taken little steps in Q1 instead of a quantum leap</strong></h1>
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                <p style="text-align:justify">There is euphoria abound about India&#39;s growth performance during the first quarter of the current fiscal. As compared to the corresponding period last year, the year-on-year (y-o-y) GDP growth in the first quarter (Q1) of 2022-23 is down. However, one should take into account the fact that the high growth performance of the real GDP in Q1 of 2021-22 was due to the low base in the corresponding period of the first pandemic year. The optimism surrounding y-o-y&nbsp;real GDP growth in the first quarter this year therefore appears to be natural.&nbsp;</p><p style="text-align:justify">On further delving into the data, it can be discovered that after two years of the pandemic, the GDP in the Q1 of the current fiscal, crossed the GDP figure corresponding to the Q1 of 2019-20. Please see chart-1.&nbsp;</p><p style="text-align:justify"><img alt="" src="/upload/images/Chart%201%20Quarterly%20Estimates%20of%20Expenditure%20Components%20of%20GDP%20for%20Q1%20at%202011-12%20Prices%20in%20Rs.%20Crore%281%29.png" style="height:687px; width:997px" /></p><p style="text-align:justify"><em><strong>Source: **</strong> Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2022-23, released on 31 August, 2022, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2022-23.pdf" title="/upload/files/PRESS_NOTE-Q1_2022-23.pdf">click here</a> to access&nbsp;</em></p><p style="text-align:justify"><em><strong>*</strong> Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2021-22, released on 31 August, 2021, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2021-22.pdf" title="/upload/files/PRESS_NOTE-Q1_2021-22.pdf">click here</a> to access &nbsp;</em></p><p style="text-align:justify"><em><strong>##</strong> Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2020-21, released on 31 August, 2020, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf" title="/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf">click here</a> to access&nbsp;</em></p><p style="text-align:justify"><em><strong># </strong>Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2019-20, released on 30 August, 2019, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2019-20.pdf" title="/upload/files/PRESS_NOTE-Q1_2019-20.pdf">click here</a> to access&nbsp;</em></p><p style="text-align:justify"><em><strong>Note: </strong>Kindly <a href="https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423" title="https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423">click here</a> to access the data in a spreadsheet</em><br /><strong>---</strong></p><p style="text-align:justify">Growth in the real GDP is vital because it provides the government with additional revenue to spend. When the economy expands, it signifies that the economic activities are reaching the level as they existed during the normal times i.e., before the pandemic had struck. With the return of the economy to normalcy, employment generation is expected to take place. Employment creation can lead to a resurgence in effective demand i.e., purchasing power.</p><p style="text-align:justify"><strong>Measuring real GDP growth after 2 years of the pandemic</strong></p><p style="text-align:justify">The GDP at constant prices expanded by <a href="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022.pdf" title="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022.pdf">4.1 percent in the last quarter (Q4)</a> of 2021-22. While the real economy grew y-o-y by 13.51 percent in the Q1 as compared to a y-o-y real GDP growth of 20.08 percent in the corresponding period last year, a different picture emerges when the base is shifted to Q1 GDP in the pre-covid times. As compared to the 3-year average of the Q1 GDP pertaining to 2017-18, 2018-19, and 2019-20, the real GDP in the first quarter of the current fiscal expanded by 9.58 percent i.e., less than the y-o-y growth of 13.51 percent. Please take a&nbsp;look at table-1.&nbsp;</p><p style="text-align:justify"><strong>Table 1: Quarterly Estimates of Expenditure Components of GDP for Q1 (April-June) at 2011-12 Prices, various years (in Rs. Crore)</strong></p><p style="text-align:justify"><img alt="" src="/upload/images/Table%201%20Quarterly%20Estimates%20of%20Expenditure%20Components%20of%20GDP%20for%20Q1%20at%202011-12%20Prices%20in%20Rs.%20Crore.png" style="height:309px; width:874px" /></p><p style="text-align:justify"><em><strong>Source: </strong>Same as chart-1<br /><strong>Note: </strong>Kindly <a href="https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423" title="https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423">click here</a> to access the data in a spreadsheet</em><br /><strong>---</strong></p><p style="text-align:justify">As compared to the 3-year average of the GDP during the first quarter of 2017-18, 2018-19 and 2019-20, the real GDP in the corresponding period last year contracted by 3.46 percent. As opposed to that, the y-o-y GDP expansion was to the tune of 20.08 percent in Q1 of 2021-22. Thus, the real GDP growth changes with the change in base and also the base year.</p><p style="text-align:justify"><strong>All the high frequency indicators aren&rsquo;t moving in the same direction</strong></p><p style="text-align:justify">After the completion of the first quarter of the current fiscal, the Ministry of Statistics and Programme Implementation (MoSPI) has provided the first estimate of the Q1&rsquo;s GDP. On the basis of about <a href="/upload/files/High%20frequency%20indicators.png" title="/upload/files/High%20frequency%20indicators.png">20 high frequency indicators</a>, the sector-wise estimates have been compiled by the ministry. Out of the 20 indicators, in the case of &#39;total telephone subscribers&#39; <em>(-2.5 percent)</em>, &#39;cargo handled at airports&#39; <em>(-1.7 percent)</em>, and &#39;Index of Industrial Production (IIP) pertaining to metallic minerals&#39; <em>(-6.5 percent)</em>, there has been y-o-y contractions in Q1 of 2022-23 as opposed to positive growths in the corresponding period last year. &nbsp;</p><p style="text-align:justify">In the case of certain high frequency indicators like &#39;production of cement&#39;, &#39;consumption of steel&#39;, &#39;sales of commercial vehicles&#39;, &#39;purchase of private vehicles&#39;, &#39;cargo handled at major sea ports&#39;, &#39;passengers handled at airports&#39;, &#39;IIP pertaining to mining and manufacturing&#39;, &#39;net tonne kilometer - railways&#39;, etc., the y-o-y percentage growth has reduced between Q1 of 2021-22 and Q1 of 2022-23.</p><p style="text-align:justify"><strong>Two-wheeler sale to the average Indian citizen still down</strong></p><p style="text-align:justify">Some economists tend to use the data on two-wheeler sale, which is provided by the industry body <a href="https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/" title="https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/">Society of Indian Automobile Manufacturers (SIAM)</a>. However, the SIAM data is related to the number of units which is <a href="https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/" title="https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/">sold by the manufacturers to dealers</a> across the country. During economic slowdown, dealers may be unable to sell the products they purchase from manufacturers, which could lead to building up of inventory with the former. Hence, the SIAM data may not capture the real situation i.e., the number of two-wheelers bought by the final consumers.&nbsp;</p><p style="text-align:justify"><img alt="" src="/upload/images/Chart%202%20Two%20wheeler%20vehicles%20registered%20in%20Q1%20of%20various%20years.png" style="height:555px; width:780px" /></p><p style="text-align:justify"><em><strong>Source: </strong>Vahan registration website,&nbsp;Ministry of Road Transport and Highways,&nbsp;please <a href="https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml" title="https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml">click here</a> to access&nbsp;<br /><strong>Note: </strong>Kindly <a href="https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423" title="https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423">click here</a> to access the data in a spreadsheet</em><br /><strong>---</strong></p><p style="text-align:justify">Instead of using SIAM data on two-wheeler sale, the data&nbsp;that is provided by <a href="https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml" title="https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml">Vahan dashboard</a> on vehicle registration, is used in the present piece. As compared to the 3-year average of the number of two-wheelers <em>(sum of non-transport and transport-two-wheelers) </em>registered during April-June of 2017, 2018 and 2019, the number of two-wheeler vehicles registered in the first quarters of 2020, 2021 and 2022 has been lower. In short, if the number of two-wheelers registered is used for analysis, then it shows that the purchasing power of the average Indian consumer has still not reached the pre-pandemic level.&nbsp;Please have a look at chart-2.&nbsp;</p><p style="text-align:justify"><strong>Whatever happened to consumer demand?</strong></p><p style="text-align:justify">The Private Final Consumption Expenditure (PFCE) <a href="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF" title="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">represents the value of goods and services</a> <a href="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF" title="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">consumed by the households</a> and <a href="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF" title="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">the private non-profit institutions</a> <a href="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF" title="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">serving households (NPISHs)</a> in the period extending from the beginning of April of one calendar year to the end of March of the next. In 2021-22 <em>(provisional estimates)</em>, PFCE&nbsp;i.e., final consumer spending <em>(at 2011-12 prices) </em>as a proportion of GDP <em>(at 2011-12 prices) </em>was 56.85 percent. Therefore, the revival of consumer demand is essential for boosting economic growth. The y-o-y growth rates of PFCE <em>(at constant prices) </em>were 8.88 percent in 2017-18, 6.61 percent in 2018-19, and 4.45 percent in 2019-20 <em>(2nd revised estimates)</em>. However, the y-o-y growth rates of PFCE <em>(at constant price)</em> dipped to -6.0 percent in 2020-21 <em>(1st RE)</em> but bounced back to 7.91 percent in 2021-22 <em>(PE)</em>. Please see table-2.</p><p style="text-align:justify"><strong>Table 2: Provisional Estimates of National Income and Expenditure Components of GDP, various years (at 2011- 12 Prices)</strong></p><p style="text-align:justify"><img alt="" src="/upload/images/Table%202%20Provisional%20Estimates%20of%20National%20Income%20and%20Expenditure%20Components%20of%20GDP%20various%20years%20at%202011-12%20Prices.png" style="height:523px; width:1050px" /></p><p style="text-align:justify"><em><strong>Source:</strong> <strong>**</strong> Press Note on Provisional Estimates of Annual National Income 2021-22 and Quarterly Estimates of Gross Domestic Product for the Fourth Quarter (Q4) of 2021-22, released on 31 May 2022, MoSPI, please <a href="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf" title="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf">click here</a> to access &nbsp;</em></p><p style="text-align:justify"><em><strong>#</strong> Press Note on First Advance Estimates of National Income 2020-21, released on 7 January, 2021, MoSPI, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf" title="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf">click here</a> to access &nbsp;</em></p><p style="text-align:justify"><em><strong>## </strong>Press Note on First Advance Estimates of National Income 2019-20, released on 7 January, 2020, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf" title="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf">click here</a> to access &nbsp;</em></p><p style="text-align:justify"><em><strong>#* </strong>Press Note on First Advance Estimates of National Income 2018-19, released on 7 January, 2019, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf" title="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf">click here</a> to access &nbsp;</em></p><p style="text-align:justify"><em><strong>^* </strong>Press Note on First Advance Estimates of National Income 2017-18, released on 5 January, 2018, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf" title="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf">click here</a> to access &nbsp;</em></p><p style="text-align:justify"><em><strong>^^ </strong>Press Note on Provisional Estimates of National Income 2016-17, released on 31 May, 2017, please <a href="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf" title="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf">click here</a> to access&nbsp;</em></p><p style="text-align:justify"><em><strong>Note: </strong>Kindly <a href="https://docs.google.com/spreadsheets/d/1aiEDfCYkTynV-ucq46fwJKffZosApMMk/edit?usp=sharing&amp;ouid=112233925171588304692&amp;rtpof=true&amp;sd=true" title="https://docs.google.com/spreadsheets/d/1aiEDfCYkTynV-ucq46fwJKffZosApMMk/edit?usp=sharing&amp;ouid=112233925171588304692&amp;rtpof=true&amp;sd=true">click here</a> to access the data in a spreadsheet</em><br /><strong>---</strong></p><p style="text-align:justify">As compared to the 3-year average of the PFCE <em>(at constant prices)</em> pertaining to 2017-18, 2018-19, and 2019-20 <em>(2nd RE)</em>, the real PFCE in 2020-21 <em>(1st RE)</em> and 2021-22 <em>(PE)</em> grew by -1.25 percent and 6.56 percent, respectively. The advance estimates of GDP <em>(at 2011-12 prices) </em>for 2022-23 would be released in January next year. Till then, we will have to wait for commenting further about the sustained growth of consumer demand. <a href="https://www.mse.ac.in/wp-content/uploads/2020/02/Ind-exp.-dec-13-Mind-the-statistics-gap.pdf" title="https://www.mse.ac.in/wp-content/uploads/2020/02/Ind-exp.-dec-13-Mind-the-statistics-gap.pdf">Experts have suggested</a> that in order to gauge consumer demand and income poverty, consumption expenditure survey of households by the National Statistical Office (NSO) needs to be done and the results are required to be published along with the release of&nbsp;unit-level data. It is worth noting that the <a href="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF" title="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">gap between the National Accounts Statistics (NAS)</a> <a href="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF" title="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">estimates of PFCE</a> and the <a href="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF" title="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">National Sample Survey (NSS)</a> <a href="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF" title="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">estimates of household consumption expenditure</a>&nbsp;<em>(aggregated at the national level)</em> has grown progressively over the years.&nbsp;</p><p style="text-align:justify"><strong>An alternative perspective</strong></p><p style="text-align:justify">As said earlier, the y-o-y growth of GDP at constant prices during Q1 of 2022-23 was <a href="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf" title="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf">13.5 percent</a>, whereas the y-o-y growth of GDP at current prices during the same period was <a href="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf" title="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf">26.7 percent</a>. It means that the GDP deflator grew y-o-y by 13.2 percent.&nbsp;</p><p style="text-align:justify">Likewise, the y-o-y growth of real Gross Value Added (GVA) at basic prices during Q1 of 2022-23 was <a href="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf" title="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf">12.7 percent</a>, whereas the y-o-y growth of GVA at basic prices at current prices during the same period was <a href="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf" title="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf">26.5 percent</a>. So, the GVA deflator grew y-o-y by 13.8 percent.&nbsp;</p><p style="text-align:justify">In order to arrive at GDP at constant prices from GDP at current prices, one needs a deflator. In the case of <a href="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html" title="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html">single deflation method</a>, a common price deflator is utilised to adjust both input and output prices. For <a href="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html" title="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html">double deflation method</a>, one needs two different deflators for adjusting input and output prices. In India, double deflation is done for agriculture, and mining and quarrying, whereas single deflation is used for other sectors. Thus, in <a href="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html" title="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html">our country, a mix</a> of single and double deflation methods is used. &nbsp;&nbsp;</p><p style="text-align:justify">A <a href="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html" title="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html">recent analysis</a> by Pragya Srivastava, published in Livemint.com, tells us that the GDP deflator on an average reflects 70 percent of the Wholesale Price Index (WPI) and 30 percent of the Consumer Price Index (CPI). As per HSBC Global Research, input prices <em>(reflected by WPI rise) </em>in the Q1 of 2022-23 have grown faster than the output prices <em>(indicated by the CPI increase)</em>, possibly leading to an underestimation of GVA growth, and therefore GDP growth. Remember, <a href="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf" title="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf">GDP at market prices</a> is derived as the <a href="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf" title="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf">sum of the GVA at basic prices</a>, <a href="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf" title="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf">plus all taxes on products</a>, <a href="https://pib.gov.in/PressReleasePage.aspx?PRID=1723153" title="https://pib.gov.in/PressReleasePage.aspx?PRID=1723153">less all subsidies on products</a>. In the case of single deflation method, if input <em>(indicated by WPI) </em>and output <em>(reflected by CPI)</em> prices expand at different rates, then it may cause overestimation or underestimation of economic performance.</p><p style="text-align:justify">A technical discussion by Jyoti Sharma <em>(please click <a href="https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html" title="https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html">here</a> and <a href="https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html" title="https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html">here</a> to access)</em> informs us that ideally, the GDP deflator of the MoSPI lies in the range {min. (CPI, WPI), max. (CPI, WPI)} i.e., the deflator must fall in the range defined by minimum of CPI and WPI and maximum of CPI and WPI for a sector. She proposes that in the case of double deflation method, CPI as a deflator for output value, and WPI for input value should be used. Instead of going for mix method, which India uses, one should go for either single or double deflation method across the sectors and sub-sectors in order to compare the trends across sectors.</p><p style="text-align:justify"><strong><em>References:&nbsp;</em></strong></p><p style="text-align:justify">Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2022-23, released on 31 August, 2022, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2022-23.pdf" title="/upload/files/PRESS_NOTE-Q1_2022-23.pdf">click here</a> to access&nbsp;</p><p style="text-align:justify">Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2021-22, released on 31 August, 2021, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2021-22.pdf" title="/upload/files/PRESS_NOTE-Q1_2021-22.pdf">click here</a> to access &nbsp;</p><p style="text-align:justify">Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2020-21, released on 31 August, 2020, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf" title="/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf">click here</a> to access&nbsp;</p><p style="text-align:justify">Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2019-20, released on 30 August, 2019, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2019-20.pdf" title="/upload/files/PRESS_NOTE-Q1_2019-20.pdf">click here</a> to access&nbsp;</p><p style="text-align:justify">Vahan registration website,&nbsp;Ministry of Road Transport and Highways,&nbsp;please <a href="https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml" title="https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml">click here</a> to access&nbsp;</p><p style="text-align:justify">Press Note on Provisional Estimates of Annual National Income 2021-22 and Quarterly Estimates of Gross Domestic Product for the Fourth Quarter (Q4) of 2021-22, released on 31 May 2022, MoSPI, please <a href="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf" title="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf">click here</a> to access &nbsp;</p><p style="text-align:justify">Press Note on First Advance Estimates of National Income 2020-21, released on 7 January, 2021, MoSPI, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf" title="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf">click here</a> to access &nbsp;</p><p style="text-align:justify">Press Note on First Advance Estimates of National Income 2019-20, released on 7 January, 2020, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf" title="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf">click here</a> to access &nbsp;</p><p style="text-align:justify">Press Note on First Advance Estimates of National Income 2018-19, released on 7 January, 2019, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf" title="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf">click here</a> to access &nbsp;</p><p style="text-align:justify">Press Note on First Advance Estimates of National Income 2017-18, released on 5 January, 2018, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf" title="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf">click here</a> to access &nbsp;</p><p style="text-align:justify">Press Note on Provisional Estimates of National Income 2016-17, released on 31 May, 2017, please <a href="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf" title="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf">click here</a> to access&nbsp;</p><p style="text-align:justify">Press release: Provisional estimates of Annual National Income, 2020-21 and Quarterly estimates (Q4) of Gross Domestic Product, 2020-21, Ministry of Statistics &amp; Programme Implementation, Press Information Bureau, released on 31 May, 2021, please click <a href="https://pib.gov.in/PressReleasePage.aspx?PRID=1723153" title="https://pib.gov.in/PressReleasePage.aspx?PRID=1723153">here</a> and <a href="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf" title="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf">here</a> to access &nbsp;&nbsp;</p><p style="text-align:justify">Estimates of Food Consumption Expenditure from Household Surveys and National Accounts -AC Kulshreshtha and Aloke Kar, Central Statistical Organisation (CSO), please <a href="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF" title="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">click here</a> to access&nbsp;</p><p style="text-align:justify">Is the GDP number an underestimate? -Pragya Srivastava, Livemint.com, 2 September, 2022, please <a href="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html" title="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html">click here</a> to access</p><p style="text-align:justify">The Real Story Behind India&rsquo;s Two Wheeler Sales or Rather the Lack of It -Vivek Kaul, 19 November, 2020, please <a href="https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/" title="https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/">click here</a> to access&nbsp;</p><p style="text-align:justify">Mind the statistics gap -C Rangarajan and S Mahendra Dev, The Indian Express, 13 December, 2019, please <a href="https://bit.ly/3Dsq9y2" title="https://bit.ly/3Dsq9y2">click here</a> to access&nbsp;</p><p style="text-align:justify">India&rsquo;s GDP: Deflating the right way -Jyoti Sharma, Ideas for India, 12 October, 2017, please <a href="https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html" title="https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html">click here</a> to access</p><p style="text-align:justify">India&rsquo;s GDP: Deflating the right way -Jyoti Sharma, Livemint.com, 12 October, 2017, please <a href="https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html" title="https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html">click here</a> to access</p><p style="text-align:justify">&nbsp;</p><p style="text-align:justify"><strong>Image Courtesy: Inclusive Media for Change/ Shambhu Ghatak</strong></p>               </font>
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		&#039;id&#039; =&gt; (int) 63693,
		&#039;title&#039; =&gt; &#039;Realistic analysis shows that the Indian economy has simply taken little steps in Q1 instead of a quantum leap&#039;,
		&#039;subheading&#039; =&gt; null,
		&#039;description&#039; =&gt; &#039;&lt;p style=&quot;text-align:justify&quot;&gt;There is euphoria abound about India&amp;#39;s growth performance during the first quarter of the current fiscal. As compared to the corresponding period last year, the year-on-year (y-o-y) GDP growth in the first quarter (Q1) of 2022-23 is down. However, one should take into account the fact that the high growth performance of the real GDP in Q1 of 2021-22 was due to the low base in the corresponding period of the first pandemic year. The optimism surrounding y-o-y&amp;nbsp;real GDP growth in the first quarter this year therefore appears to be natural.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;On further delving into the data, it can be discovered that after two years of the pandemic, the GDP in the Q1 of the current fiscal, crossed the GDP figure corresponding to the Q1 of 2019-20. Please see chart-1.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Chart%201%20Quarterly%20Estimates%20of%20Expenditure%20Components%20of%20GDP%20for%20Q1%20at%202011-12%20Prices%20in%20Rs.%20Crore%281%29.png&quot; style=&quot;height:687px; width:997px&quot; /&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source: **&lt;/strong&gt; Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2022-23, released on 31 August, 2022, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;*&lt;/strong&gt; Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2021-22, released on 31 August, 2021, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2021-22.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;##&lt;/strong&gt; Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2020-21, released on 31 August, 2020, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;# &lt;/strong&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2019-20, released on 30 August, 2019, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2019-20.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;
&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Growth in the real GDP is vital because it provides the government with additional revenue to spend. When the economy expands, it signifies that the economic activities are reaching the level as they existed during the normal times i.e., before the pandemic had struck. With the return of the economy to normalcy, employment generation is expected to take place. Employment creation can lead to a resurgence in effective demand i.e., purchasing power.&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Measuring real GDP growth after 2 years of the pandemic&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;The GDP at constant prices expanded by &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022.pdf&quot;&gt;4.1 percent in the last quarter (Q4)&lt;/a&gt; of 2021-22. While the real economy grew y-o-y by 13.51 percent in the Q1 as compared to a y-o-y real GDP growth of 20.08 percent in the corresponding period last year, a different picture emerges when the base is shifted to Q1 GDP in the pre-covid times. As compared to the 3-year average of the Q1 GDP pertaining to 2017-18, 2018-19, and 2019-20, the real GDP in the first quarter of the current fiscal expanded by 9.58 percent i.e., less than the y-o-y growth of 13.51 percent. Please take a&amp;nbsp;look at table-1.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Table 1: Quarterly Estimates of Expenditure Components of GDP for Q1 (April-June) at 2011-12 Prices, various years (in Rs. Crore)&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Table%201%20Quarterly%20Estimates%20of%20Expenditure%20Components%20of%20GDP%20for%20Q1%20at%202011-12%20Prices%20in%20Rs.%20Crore.png&quot; style=&quot;height:309px; width:874px&quot; /&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source: &lt;/strong&gt;Same as chart-1&lt;br /&gt;
&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;
&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;As compared to the 3-year average of the GDP during the first quarter of 2017-18, 2018-19 and 2019-20, the real GDP in the corresponding period last year contracted by 3.46 percent. As opposed to that, the y-o-y GDP expansion was to the tune of 20.08 percent in Q1 of 2021-22. Thus, the real GDP growth changes with the change in base and also the base year.&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;All the high frequency indicators aren&amp;rsquo;t moving in the same direction&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;After the completion of the first quarter of the current fiscal, the Ministry of Statistics and Programme Implementation (MoSPI) has provided the first estimate of the Q1&amp;rsquo;s GDP. On the basis of about &lt;a href=&quot;/upload/files/High%20frequency%20indicators.png&quot;&gt;20 high frequency indicators&lt;/a&gt;, the sector-wise estimates have been compiled by the ministry. Out of the 20 indicators, in the case of &amp;#39;total telephone subscribers&amp;#39; &lt;em&gt;(-2.5 percent)&lt;/em&gt;, &amp;#39;cargo handled at airports&amp;#39; &lt;em&gt;(-1.7 percent)&lt;/em&gt;, and &amp;#39;Index of Industrial Production (IIP) pertaining to metallic minerals&amp;#39; &lt;em&gt;(-6.5 percent)&lt;/em&gt;, there has been y-o-y contractions in Q1 of 2022-23 as opposed to positive growths in the corresponding period last year. &amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;In the case of certain high frequency indicators like &amp;#39;production of cement&amp;#39;, &amp;#39;consumption of steel&amp;#39;, &amp;#39;sales of commercial vehicles&amp;#39;, &amp;#39;purchase of private vehicles&amp;#39;, &amp;#39;cargo handled at major sea ports&amp;#39;, &amp;#39;passengers handled at airports&amp;#39;, &amp;#39;IIP pertaining to mining and manufacturing&amp;#39;, &amp;#39;net tonne kilometer - railways&amp;#39;, etc., the y-o-y percentage growth has reduced between Q1 of 2021-22 and Q1 of 2022-23.&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Two-wheeler sale to the average Indian citizen still down&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Some economists tend to use the data on two-wheeler sale, which is provided by the industry body &lt;a href=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot;&gt;Society of Indian Automobile Manufacturers (SIAM)&lt;/a&gt;. However, the SIAM data is related to the number of units which is &lt;a href=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot;&gt;sold by the manufacturers to dealers&lt;/a&gt; across the country. During economic slowdown, dealers may be unable to sell the products they purchase from manufacturers, which could lead to building up of inventory with the former. Hence, the SIAM data may not capture the real situation i.e., the number of two-wheelers bought by the final consumers.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Chart%202%20Two%20wheeler%20vehicles%20registered%20in%20Q1%20of%20various%20years.png&quot; style=&quot;height:555px; width:780px&quot; /&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source: &lt;/strong&gt;Vahan registration website,&amp;nbsp;Ministry of Road Transport and Highways,&amp;nbsp;please &lt;a href=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;br /&gt;
&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;
&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Instead of using SIAM data on two-wheeler sale, the data&amp;nbsp;that is provided by &lt;a href=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot;&gt;Vahan dashboard&lt;/a&gt; on vehicle registration, is used in the present piece. As compared to the 3-year average of the number of two-wheelers &lt;em&gt;(sum of non-transport and transport-two-wheelers) &lt;/em&gt;registered during April-June of 2017, 2018 and 2019, the number of two-wheeler vehicles registered in the first quarters of 2020, 2021 and 2022 has been lower. In short, if the number of two-wheelers registered is used for analysis, then it shows that the purchasing power of the average Indian consumer has still not reached the pre-pandemic level.&amp;nbsp;Please have a look at chart-2.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Whatever happened to consumer demand?&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;The Private Final Consumption Expenditure (PFCE) &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;represents the value of goods and services&lt;/a&gt; &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;consumed by the households&lt;/a&gt; and &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;the private non-profit institutions&lt;/a&gt; &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;serving households (NPISHs)&lt;/a&gt; in the period extending from the beginning of April of one calendar year to the end of March of the next. In 2021-22 &lt;em&gt;(provisional estimates)&lt;/em&gt;, PFCE&amp;nbsp;i.e., final consumer spending &lt;em&gt;(at 2011-12 prices) &lt;/em&gt;as a proportion of GDP &lt;em&gt;(at 2011-12 prices) &lt;/em&gt;was 56.85 percent. Therefore, the revival of consumer demand is essential for boosting economic growth. The y-o-y growth rates of PFCE &lt;em&gt;(at constant prices) &lt;/em&gt;were 8.88 percent in 2017-18, 6.61 percent in 2018-19, and 4.45 percent in 2019-20 &lt;em&gt;(2nd revised estimates)&lt;/em&gt;. However, the y-o-y growth rates of PFCE &lt;em&gt;(at constant price)&lt;/em&gt; dipped to -6.0 percent in 2020-21 &lt;em&gt;(1st RE)&lt;/em&gt; but bounced back to 7.91 percent in 2021-22 &lt;em&gt;(PE)&lt;/em&gt;. Please see table-2.&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Table 2: Provisional Estimates of National Income and Expenditure Components of GDP, various years (at 2011- 12 Prices)&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Table%202%20Provisional%20Estimates%20of%20National%20Income%20and%20Expenditure%20Components%20of%20GDP%20various%20years%20at%202011-12%20Prices.png&quot; style=&quot;height:523px; width:1050px&quot; /&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source:&lt;/strong&gt; &lt;strong&gt;**&lt;/strong&gt; Press Note on Provisional Estimates of Annual National Income 2021-22 and Quarterly Estimates of Gross Domestic Product for the Fourth Quarter (Q4) of 2021-22, released on 31 May 2022, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;#&lt;/strong&gt; Press Note on First Advance Estimates of National Income 2020-21, released on 7 January, 2021, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;## &lt;/strong&gt;Press Note on First Advance Estimates of National Income 2019-20, released on 7 January, 2020, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;#* &lt;/strong&gt;Press Note on First Advance Estimates of National Income 2018-19, released on 7 January, 2019, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;^* &lt;/strong&gt;Press Note on First Advance Estimates of National Income 2017-18, released on 5 January, 2018, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;^^ &lt;/strong&gt;Press Note on Provisional Estimates of National Income 2016-17, released on 31 May, 2017, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1aiEDfCYkTynV-ucq46fwJKffZosApMMk/edit?usp=sharing&amp;amp;ouid=112233925171588304692&amp;amp;rtpof=true&amp;amp;sd=true&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;
&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;As compared to the 3-year average of the PFCE &lt;em&gt;(at constant prices)&lt;/em&gt; pertaining to 2017-18, 2018-19, and 2019-20 &lt;em&gt;(2nd RE)&lt;/em&gt;, the real PFCE in 2020-21 &lt;em&gt;(1st RE)&lt;/em&gt; and 2021-22 &lt;em&gt;(PE)&lt;/em&gt; grew by -1.25 percent and 6.56 percent, respectively. The advance estimates of GDP &lt;em&gt;(at 2011-12 prices) &lt;/em&gt;for 2022-23 would be released in January next year. Till then, we will have to wait for commenting further about the sustained growth of consumer demand. &lt;a href=&quot;https://www.mse.ac.in/wp-content/uploads/2020/02/Ind-exp.-dec-13-Mind-the-statistics-gap.pdf&quot;&gt;Experts have suggested&lt;/a&gt; that in order to gauge consumer demand and income poverty, consumption expenditure survey of households by the National Statistical Office (NSO) needs to be done and the results are required to be published along with the release of&amp;nbsp;unit-level data. It is worth noting that the &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;gap between the National Accounts Statistics (NAS)&lt;/a&gt; &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;estimates of PFCE&lt;/a&gt; and the &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;National Sample Survey (NSS)&lt;/a&gt; &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;estimates of household consumption expenditure&lt;/a&gt;&amp;nbsp;&lt;em&gt;(aggregated at the national level)&lt;/em&gt; has grown progressively over the years.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;An alternative perspective&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;As said earlier, the y-o-y growth of GDP at constant prices during Q1 of 2022-23 was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;13.5 percent&lt;/a&gt;, whereas the y-o-y growth of GDP at current prices during the same period was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;26.7 percent&lt;/a&gt;. It means that the GDP deflator grew y-o-y by 13.2 percent.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Likewise, the y-o-y growth of real Gross Value Added (GVA) at basic prices during Q1 of 2022-23 was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;12.7 percent&lt;/a&gt;, whereas the y-o-y growth of GVA at basic prices at current prices during the same period was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;26.5 percent&lt;/a&gt;. So, the GVA deflator grew y-o-y by 13.8 percent.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;In order to arrive at GDP at constant prices from GDP at current prices, one needs a deflator. In the case of &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;single deflation method&lt;/a&gt;, a common price deflator is utilised to adjust both input and output prices. For &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;double deflation method&lt;/a&gt;, one needs two different deflators for adjusting input and output prices. In India, double deflation is done for agriculture, and mining and quarrying, whereas single deflation is used for other sectors. Thus, in &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;our country, a mix&lt;/a&gt; of single and double deflation methods is used. &amp;nbsp;&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;A &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;recent analysis&lt;/a&gt; by Pragya Srivastava, published in Livemint.com, tells us that the GDP deflator on an average reflects 70 percent of the Wholesale Price Index (WPI) and 30 percent of the Consumer Price Index (CPI). As per HSBC Global Research, input prices &lt;em&gt;(reflected by WPI rise) &lt;/em&gt;in the Q1 of 2022-23 have grown faster than the output prices &lt;em&gt;(indicated by the CPI increase)&lt;/em&gt;, possibly leading to an underestimation of GVA growth, and therefore GDP growth. Remember, &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;GDP at market prices&lt;/a&gt; is derived as the &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;sum of the GVA at basic prices&lt;/a&gt;, &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;plus all taxes on products&lt;/a&gt;, &lt;a href=&quot;https://pib.gov.in/PressReleasePage.aspx?PRID=1723153&quot;&gt;less all subsidies on products&lt;/a&gt;. In the case of single deflation method, if input &lt;em&gt;(indicated by WPI) &lt;/em&gt;and output &lt;em&gt;(reflected by CPI)&lt;/em&gt; prices expand at different rates, then it may cause overestimation or underestimation of economic performance.&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;A technical discussion by Jyoti Sharma &lt;em&gt;(please click &lt;a href=&quot;https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html&quot;&gt;here&lt;/a&gt; and &lt;a href=&quot;https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html&quot;&gt;here&lt;/a&gt; to access)&lt;/em&gt; informs us that ideally, the GDP deflator of the MoSPI lies in the range {min. (CPI, WPI), max. (CPI, WPI)} i.e., the deflator must fall in the range defined by minimum of CPI and WPI and maximum of CPI and WPI for a sector. She proposes that in the case of double deflation method, CPI as a deflator for output value, and WPI for input value should be used. Instead of going for mix method, which India uses, one should go for either single or double deflation method across the sectors and sub-sectors in order to compare the trends across sectors.&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;&lt;em&gt;References:&amp;nbsp;&lt;/em&gt;&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2022-23, released on 31 August, 2022, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2021-22, released on 31 August, 2021, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2021-22.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2020-21, released on 31 August, 2020, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2019-20, released on 30 August, 2019, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2019-20.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Vahan registration website,&amp;nbsp;Ministry of Road Transport and Highways,&amp;nbsp;please &lt;a href=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Provisional Estimates of Annual National Income 2021-22 and Quarterly Estimates of Gross Domestic Product for the Fourth Quarter (Q4) of 2021-22, released on 31 May 2022, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2020-21, released on 7 January, 2021, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2019-20, released on 7 January, 2020, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2018-19, released on 7 January, 2019, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2017-18, released on 5 January, 2018, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Provisional Estimates of National Income 2016-17, released on 31 May, 2017, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press release: Provisional estimates of Annual National Income, 2020-21 and Quarterly estimates (Q4) of Gross Domestic Product, 2020-21, Ministry of Statistics &amp;amp; Programme Implementation, Press Information Bureau, released on 31 May, 2021, please click &lt;a href=&quot;https://pib.gov.in/PressReleasePage.aspx?PRID=1723153&quot;&gt;here&lt;/a&gt; and &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;here&lt;/a&gt; to access &amp;nbsp;&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Estimates of Food Consumption Expenditure from Household Surveys and National Accounts -AC Kulshreshtha and Aloke Kar, Central Statistical Organisation (CSO), please &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Is the GDP number an underestimate? -Pragya Srivastava, Livemint.com, 2 September, 2022, please &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html &quot;&gt;click here&lt;/a&gt; to access&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;The Real Story Behind India&amp;rsquo;s Two Wheeler Sales or Rather the Lack of It -Vivek Kaul, 19 November, 2020, please &lt;a href=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Mind the statistics gap -C Rangarajan and S Mahendra Dev, The Indian Express, 13 December, 2019, please &lt;a href=&quot;https://bit.ly/3Dsq9y2&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;India&amp;rsquo;s GDP: Deflating the right way -Jyoti Sharma, Ideas for India, 12 October, 2017, please &lt;a href=&quot;https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html&quot;&gt;click here&lt;/a&gt; to access&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;India&amp;rsquo;s GDP: Deflating the right way -Jyoti Sharma, Livemint.com, 12 October, 2017, please &lt;a href=&quot;https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html &quot;&gt;click here&lt;/a&gt; to access&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Image Courtesy: Inclusive Media for Change/ Shambhu Ghatak&lt;/strong&gt;&lt;/p&gt;
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	&#039;articleid&#039; =&gt; (int) 63693,
	&#039;metaTitle&#039; =&gt; &#039;NEWS ALERTS | Realistic analysis shows that the Indian economy has simply taken little steps in Q1 instead of a quantum leap&#039;,
	&#039;metaKeywords&#039; =&gt; &#039;Consumer Price Index,CPI,GDP at 2011-12 prices,GDP at constant prices,GDP at current prices,GDP deflation,Gross Value Added,GVA at basic prices,Real GDP growth,Wholesale Price Index,WPI&#039;,
	&#039;metaDesc&#039; =&gt; &#039;There is euphoria abound about India&amp;#39;s growth performance during the first quarter of the current fiscal. As compared to the corresponding period last year, the year-on-year (y-o-y) GDP growth in the first quarter (Q1) of 2022-23 is down. However, one...&#039;,
	&#039;disp&#039; =&gt; &#039;&lt;p style=&quot;text-align:justify&quot;&gt;There is euphoria abound about India&amp;#39;s growth performance during the first quarter of the current fiscal. As compared to the corresponding period last year, the year-on-year (y-o-y) GDP growth in the first quarter (Q1) of 2022-23 is down. However, one should take into account the fact that the high growth performance of the real GDP in Q1 of 2021-22 was due to the low base in the corresponding period of the first pandemic year. The optimism surrounding y-o-y&amp;nbsp;real GDP growth in the first quarter this year therefore appears to be natural.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;On further delving into the data, it can be discovered that after two years of the pandemic, the GDP in the Q1 of the current fiscal, crossed the GDP figure corresponding to the Q1 of 2019-20. Please see chart-1.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Chart%201%20Quarterly%20Estimates%20of%20Expenditure%20Components%20of%20GDP%20for%20Q1%20at%202011-12%20Prices%20in%20Rs.%20Crore%281%29.png&quot; style=&quot;height:687px; width:997px&quot; /&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source: **&lt;/strong&gt; Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2022-23, released on 31 August, 2022, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;*&lt;/strong&gt; Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2021-22, released on 31 August, 2021, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2021-22.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2021-22.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;##&lt;/strong&gt; Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2020-21, released on 31 August, 2020, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;# &lt;/strong&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2019-20, released on 30 August, 2019, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2019-20.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2019-20.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot; title=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Growth in the real GDP is vital because it provides the government with additional revenue to spend. When the economy expands, it signifies that the economic activities are reaching the level as they existed during the normal times i.e., before the pandemic had struck. With the return of the economy to normalcy, employment generation is expected to take place. Employment creation can lead to a resurgence in effective demand i.e., purchasing power.&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Measuring real GDP growth after 2 years of the pandemic&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;The GDP at constant prices expanded by &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022.pdf&quot;&gt;4.1 percent in the last quarter (Q4)&lt;/a&gt; of 2021-22. While the real economy grew y-o-y by 13.51 percent in the Q1 as compared to a y-o-y real GDP growth of 20.08 percent in the corresponding period last year, a different picture emerges when the base is shifted to Q1 GDP in the pre-covid times. As compared to the 3-year average of the Q1 GDP pertaining to 2017-18, 2018-19, and 2019-20, the real GDP in the first quarter of the current fiscal expanded by 9.58 percent i.e., less than the y-o-y growth of 13.51 percent. Please take a&amp;nbsp;look at table-1.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Table 1: Quarterly Estimates of Expenditure Components of GDP for Q1 (April-June) at 2011-12 Prices, various years (in Rs. Crore)&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Table%201%20Quarterly%20Estimates%20of%20Expenditure%20Components%20of%20GDP%20for%20Q1%20at%202011-12%20Prices%20in%20Rs.%20Crore.png&quot; style=&quot;height:309px; width:874px&quot; /&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source: &lt;/strong&gt;Same as chart-1&lt;br /&gt;&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot; title=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;As compared to the 3-year average of the GDP during the first quarter of 2017-18, 2018-19 and 2019-20, the real GDP in the corresponding period last year contracted by 3.46 percent. As opposed to that, the y-o-y GDP expansion was to the tune of 20.08 percent in Q1 of 2021-22. Thus, the real GDP growth changes with the change in base and also the base year.&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;All the high frequency indicators aren&amp;rsquo;t moving in the same direction&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;After the completion of the first quarter of the current fiscal, the Ministry of Statistics and Programme Implementation (MoSPI) has provided the first estimate of the Q1&amp;rsquo;s GDP. On the basis of about &lt;a href=&quot;/upload/files/High%20frequency%20indicators.png&quot; title=&quot;/upload/files/High%20frequency%20indicators.png&quot;&gt;20 high frequency indicators&lt;/a&gt;, the sector-wise estimates have been compiled by the ministry. Out of the 20 indicators, in the case of &amp;#39;total telephone subscribers&amp;#39; &lt;em&gt;(-2.5 percent)&lt;/em&gt;, &amp;#39;cargo handled at airports&amp;#39; &lt;em&gt;(-1.7 percent)&lt;/em&gt;, and &amp;#39;Index of Industrial Production (IIP) pertaining to metallic minerals&amp;#39; &lt;em&gt;(-6.5 percent)&lt;/em&gt;, there has been y-o-y contractions in Q1 of 2022-23 as opposed to positive growths in the corresponding period last year. &amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;In the case of certain high frequency indicators like &amp;#39;production of cement&amp;#39;, &amp;#39;consumption of steel&amp;#39;, &amp;#39;sales of commercial vehicles&amp;#39;, &amp;#39;purchase of private vehicles&amp;#39;, &amp;#39;cargo handled at major sea ports&amp;#39;, &amp;#39;passengers handled at airports&amp;#39;, &amp;#39;IIP pertaining to mining and manufacturing&amp;#39;, &amp;#39;net tonne kilometer - railways&amp;#39;, etc., the y-o-y percentage growth has reduced between Q1 of 2021-22 and Q1 of 2022-23.&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Two-wheeler sale to the average Indian citizen still down&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Some economists tend to use the data on two-wheeler sale, which is provided by the industry body &lt;a href=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot; title=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot;&gt;Society of Indian Automobile Manufacturers (SIAM)&lt;/a&gt;. However, the SIAM data is related to the number of units which is &lt;a href=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot; title=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot;&gt;sold by the manufacturers to dealers&lt;/a&gt; across the country. During economic slowdown, dealers may be unable to sell the products they purchase from manufacturers, which could lead to building up of inventory with the former. Hence, the SIAM data may not capture the real situation i.e., the number of two-wheelers bought by the final consumers.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Chart%202%20Two%20wheeler%20vehicles%20registered%20in%20Q1%20of%20various%20years.png&quot; style=&quot;height:555px; width:780px&quot; /&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source: &lt;/strong&gt;Vahan registration website,&amp;nbsp;Ministry of Road Transport and Highways,&amp;nbsp;please &lt;a href=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot; title=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;br /&gt;&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot; title=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Instead of using SIAM data on two-wheeler sale, the data&amp;nbsp;that is provided by &lt;a href=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot; title=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot;&gt;Vahan dashboard&lt;/a&gt; on vehicle registration, is used in the present piece. As compared to the 3-year average of the number of two-wheelers &lt;em&gt;(sum of non-transport and transport-two-wheelers) &lt;/em&gt;registered during April-June of 2017, 2018 and 2019, the number of two-wheeler vehicles registered in the first quarters of 2020, 2021 and 2022 has been lower. In short, if the number of two-wheelers registered is used for analysis, then it shows that the purchasing power of the average Indian consumer has still not reached the pre-pandemic level.&amp;nbsp;Please have a look at chart-2.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Whatever happened to consumer demand?&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;The Private Final Consumption Expenditure (PFCE) &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;represents the value of goods and services&lt;/a&gt; &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;consumed by the households&lt;/a&gt; and &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;the private non-profit institutions&lt;/a&gt; &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;serving households (NPISHs)&lt;/a&gt; in the period extending from the beginning of April of one calendar year to the end of March of the next. In 2021-22 &lt;em&gt;(provisional estimates)&lt;/em&gt;, PFCE&amp;nbsp;i.e., final consumer spending &lt;em&gt;(at 2011-12 prices) &lt;/em&gt;as a proportion of GDP &lt;em&gt;(at 2011-12 prices) &lt;/em&gt;was 56.85 percent. Therefore, the revival of consumer demand is essential for boosting economic growth. The y-o-y growth rates of PFCE &lt;em&gt;(at constant prices) &lt;/em&gt;were 8.88 percent in 2017-18, 6.61 percent in 2018-19, and 4.45 percent in 2019-20 &lt;em&gt;(2nd revised estimates)&lt;/em&gt;. However, the y-o-y growth rates of PFCE &lt;em&gt;(at constant price)&lt;/em&gt; dipped to -6.0 percent in 2020-21 &lt;em&gt;(1st RE)&lt;/em&gt; but bounced back to 7.91 percent in 2021-22 &lt;em&gt;(PE)&lt;/em&gt;. Please see table-2.&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Table 2: Provisional Estimates of National Income and Expenditure Components of GDP, various years (at 2011- 12 Prices)&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Table%202%20Provisional%20Estimates%20of%20National%20Income%20and%20Expenditure%20Components%20of%20GDP%20various%20years%20at%202011-12%20Prices.png&quot; style=&quot;height:523px; width:1050px&quot; /&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source:&lt;/strong&gt; &lt;strong&gt;**&lt;/strong&gt; Press Note on Provisional Estimates of Annual National Income 2021-22 and Quarterly Estimates of Gross Domestic Product for the Fourth Quarter (Q4) of 2021-22, released on 31 May 2022, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;#&lt;/strong&gt; Press Note on First Advance Estimates of National Income 2020-21, released on 7 January, 2021, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;## &lt;/strong&gt;Press Note on First Advance Estimates of National Income 2019-20, released on 7 January, 2020, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;#* &lt;/strong&gt;Press Note on First Advance Estimates of National Income 2018-19, released on 7 January, 2019, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;^* &lt;/strong&gt;Press Note on First Advance Estimates of National Income 2017-18, released on 5 January, 2018, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;^^ &lt;/strong&gt;Press Note on Provisional Estimates of National Income 2016-17, released on 31 May, 2017, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1aiEDfCYkTynV-ucq46fwJKffZosApMMk/edit?usp=sharing&amp;amp;ouid=112233925171588304692&amp;amp;rtpof=true&amp;amp;sd=true&quot; title=&quot;https://docs.google.com/spreadsheets/d/1aiEDfCYkTynV-ucq46fwJKffZosApMMk/edit?usp=sharing&amp;amp;ouid=112233925171588304692&amp;amp;rtpof=true&amp;amp;sd=true&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;As compared to the 3-year average of the PFCE &lt;em&gt;(at constant prices)&lt;/em&gt; pertaining to 2017-18, 2018-19, and 2019-20 &lt;em&gt;(2nd RE)&lt;/em&gt;, the real PFCE in 2020-21 &lt;em&gt;(1st RE)&lt;/em&gt; and 2021-22 &lt;em&gt;(PE)&lt;/em&gt; grew by -1.25 percent and 6.56 percent, respectively. The advance estimates of GDP &lt;em&gt;(at 2011-12 prices) &lt;/em&gt;for 2022-23 would be released in January next year. Till then, we will have to wait for commenting further about the sustained growth of consumer demand. &lt;a href=&quot;https://www.mse.ac.in/wp-content/uploads/2020/02/Ind-exp.-dec-13-Mind-the-statistics-gap.pdf&quot; title=&quot;https://www.mse.ac.in/wp-content/uploads/2020/02/Ind-exp.-dec-13-Mind-the-statistics-gap.pdf&quot;&gt;Experts have suggested&lt;/a&gt; that in order to gauge consumer demand and income poverty, consumption expenditure survey of households by the National Statistical Office (NSO) needs to be done and the results are required to be published along with the release of&amp;nbsp;unit-level data. It is worth noting that the &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;gap between the National Accounts Statistics (NAS)&lt;/a&gt; &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;estimates of PFCE&lt;/a&gt; and the &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;National Sample Survey (NSS)&lt;/a&gt; &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;estimates of household consumption expenditure&lt;/a&gt;&amp;nbsp;&lt;em&gt;(aggregated at the national level)&lt;/em&gt; has grown progressively over the years.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;An alternative perspective&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;As said earlier, the y-o-y growth of GDP at constant prices during Q1 of 2022-23 was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot; title=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;13.5 percent&lt;/a&gt;, whereas the y-o-y growth of GDP at current prices during the same period was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot; title=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;26.7 percent&lt;/a&gt;. It means that the GDP deflator grew y-o-y by 13.2 percent.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Likewise, the y-o-y growth of real Gross Value Added (GVA) at basic prices during Q1 of 2022-23 was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot; title=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;12.7 percent&lt;/a&gt;, whereas the y-o-y growth of GVA at basic prices at current prices during the same period was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot; title=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;26.5 percent&lt;/a&gt;. So, the GVA deflator grew y-o-y by 13.8 percent.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;In order to arrive at GDP at constant prices from GDP at current prices, one needs a deflator. In the case of &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot; title=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;single deflation method&lt;/a&gt;, a common price deflator is utilised to adjust both input and output prices. For &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot; title=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;double deflation method&lt;/a&gt;, one needs two different deflators for adjusting input and output prices. In India, double deflation is done for agriculture, and mining and quarrying, whereas single deflation is used for other sectors. Thus, in &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot; title=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;our country, a mix&lt;/a&gt; of single and double deflation methods is used. &amp;nbsp;&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;A &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot; title=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;recent analysis&lt;/a&gt; by Pragya Srivastava, published in Livemint.com, tells us that the GDP deflator on an average reflects 70 percent of the Wholesale Price Index (WPI) and 30 percent of the Consumer Price Index (CPI). As per HSBC Global Research, input prices &lt;em&gt;(reflected by WPI rise) &lt;/em&gt;in the Q1 of 2022-23 have grown faster than the output prices &lt;em&gt;(indicated by the CPI increase)&lt;/em&gt;, possibly leading to an underestimation of GVA growth, and therefore GDP growth. Remember, &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot; title=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;GDP at market prices&lt;/a&gt; is derived as the &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot; title=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;sum of the GVA at basic prices&lt;/a&gt;, &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot; title=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;plus all taxes on products&lt;/a&gt;, &lt;a href=&quot;https://pib.gov.in/PressReleasePage.aspx?PRID=1723153&quot; title=&quot;https://pib.gov.in/PressReleasePage.aspx?PRID=1723153&quot;&gt;less all subsidies on products&lt;/a&gt;. In the case of single deflation method, if input &lt;em&gt;(indicated by WPI) &lt;/em&gt;and output &lt;em&gt;(reflected by CPI)&lt;/em&gt; prices expand at different rates, then it may cause overestimation or underestimation of economic performance.&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;A technical discussion by Jyoti Sharma &lt;em&gt;(please click &lt;a href=&quot;https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html&quot; title=&quot;https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html&quot;&gt;here&lt;/a&gt; and &lt;a href=&quot;https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html&quot; title=&quot;https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html&quot;&gt;here&lt;/a&gt; to access)&lt;/em&gt; informs us that ideally, the GDP deflator of the MoSPI lies in the range {min. (CPI, WPI), max. (CPI, WPI)} i.e., the deflator must fall in the range defined by minimum of CPI and WPI and maximum of CPI and WPI for a sector. She proposes that in the case of double deflation method, CPI as a deflator for output value, and WPI for input value should be used. Instead of going for mix method, which India uses, one should go for either single or double deflation method across the sectors and sub-sectors in order to compare the trends across sectors.&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;&lt;em&gt;References:&amp;nbsp;&lt;/em&gt;&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2022-23, released on 31 August, 2022, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2021-22, released on 31 August, 2021, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2021-22.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2021-22.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2020-21, released on 31 August, 2020, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2019-20, released on 30 August, 2019, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2019-20.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2019-20.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Vahan registration website,&amp;nbsp;Ministry of Road Transport and Highways,&amp;nbsp;please &lt;a href=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot; title=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Provisional Estimates of Annual National Income 2021-22 and Quarterly Estimates of Gross Domestic Product for the Fourth Quarter (Q4) of 2021-22, released on 31 May 2022, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2020-21, released on 7 January, 2021, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2019-20, released on 7 January, 2020, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2018-19, released on 7 January, 2019, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2017-18, released on 5 January, 2018, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Provisional Estimates of National Income 2016-17, released on 31 May, 2017, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press release: Provisional estimates of Annual National Income, 2020-21 and Quarterly estimates (Q4) of Gross Domestic Product, 2020-21, Ministry of Statistics &amp;amp; Programme Implementation, Press Information Bureau, released on 31 May, 2021, please click &lt;a href=&quot;https://pib.gov.in/PressReleasePage.aspx?PRID=1723153&quot; title=&quot;https://pib.gov.in/PressReleasePage.aspx?PRID=1723153&quot;&gt;here&lt;/a&gt; and &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot; title=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;here&lt;/a&gt; to access &amp;nbsp;&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Estimates of Food Consumption Expenditure from Household Surveys and National Accounts -AC Kulshreshtha and Aloke Kar, Central Statistical Organisation (CSO), please &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Is the GDP number an underestimate? -Pragya Srivastava, Livemint.com, 2 September, 2022, please &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot; title=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;click here&lt;/a&gt; to access&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;The Real Story Behind India&amp;rsquo;s Two Wheeler Sales or Rather the Lack of It -Vivek Kaul, 19 November, 2020, please &lt;a href=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot; title=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Mind the statistics gap -C Rangarajan and S Mahendra Dev, The Indian Express, 13 December, 2019, please &lt;a href=&quot;https://bit.ly/3Dsq9y2&quot; title=&quot;https://bit.ly/3Dsq9y2&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;India&amp;rsquo;s GDP: Deflating the right way -Jyoti Sharma, Ideas for India, 12 October, 2017, please &lt;a href=&quot;https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html&quot; title=&quot;https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html&quot;&gt;click here&lt;/a&gt; to access&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;India&amp;rsquo;s GDP: Deflating the right way -Jyoti Sharma, Livemint.com, 12 October, 2017, please &lt;a href=&quot;https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html&quot; title=&quot;https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html&quot;&gt;click here&lt;/a&gt; to access&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Image Courtesy: Inclusive Media for Change/ Shambhu Ghatak&lt;/strong&gt;&lt;/p&gt;&#039;,
	&#039;lang&#039; =&gt; &#039;English&#039;,
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	&#039;site_title&#039; =&gt; &#039;im4change&#039;,
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	&#039;id&#039; =&gt; (int) 63693,
	&#039;title&#039; =&gt; &#039;Realistic analysis shows that the Indian economy has simply taken little steps in Q1 instead of a quantum leap&#039;,
	&#039;subheading&#039; =&gt; null,
	&#039;description&#039; =&gt; &#039;&lt;p style=&quot;text-align:justify&quot;&gt;There is euphoria abound about India&amp;#39;s growth performance during the first quarter of the current fiscal. As compared to the corresponding period last year, the year-on-year (y-o-y) GDP growth in the first quarter (Q1) of 2022-23 is down. However, one should take into account the fact that the high growth performance of the real GDP in Q1 of 2021-22 was due to the low base in the corresponding period of the first pandemic year. The optimism surrounding y-o-y&amp;nbsp;real GDP growth in the first quarter this year therefore appears to be natural.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;On further delving into the data, it can be discovered that after two years of the pandemic, the GDP in the Q1 of the current fiscal, crossed the GDP figure corresponding to the Q1 of 2019-20. Please see chart-1.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Chart%201%20Quarterly%20Estimates%20of%20Expenditure%20Components%20of%20GDP%20for%20Q1%20at%202011-12%20Prices%20in%20Rs.%20Crore%281%29.png&quot; style=&quot;height:687px; width:997px&quot; /&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source: **&lt;/strong&gt; Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2022-23, released on 31 August, 2022, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;*&lt;/strong&gt; Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2021-22, released on 31 August, 2021, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2021-22.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;##&lt;/strong&gt; Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2020-21, released on 31 August, 2020, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;# &lt;/strong&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2019-20, released on 30 August, 2019, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2019-20.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;
&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Growth in the real GDP is vital because it provides the government with additional revenue to spend. When the economy expands, it signifies that the economic activities are reaching the level as they existed during the normal times i.e., before the pandemic had struck. With the return of the economy to normalcy, employment generation is expected to take place. Employment creation can lead to a resurgence in effective demand i.e., purchasing power.&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Measuring real GDP growth after 2 years of the pandemic&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;The GDP at constant prices expanded by &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022.pdf&quot;&gt;4.1 percent in the last quarter (Q4)&lt;/a&gt; of 2021-22. While the real economy grew y-o-y by 13.51 percent in the Q1 as compared to a y-o-y real GDP growth of 20.08 percent in the corresponding period last year, a different picture emerges when the base is shifted to Q1 GDP in the pre-covid times. As compared to the 3-year average of the Q1 GDP pertaining to 2017-18, 2018-19, and 2019-20, the real GDP in the first quarter of the current fiscal expanded by 9.58 percent i.e., less than the y-o-y growth of 13.51 percent. Please take a&amp;nbsp;look at table-1.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Table 1: Quarterly Estimates of Expenditure Components of GDP for Q1 (April-June) at 2011-12 Prices, various years (in Rs. Crore)&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Table%201%20Quarterly%20Estimates%20of%20Expenditure%20Components%20of%20GDP%20for%20Q1%20at%202011-12%20Prices%20in%20Rs.%20Crore.png&quot; style=&quot;height:309px; width:874px&quot; /&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source: &lt;/strong&gt;Same as chart-1&lt;br /&gt;
&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;
&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;As compared to the 3-year average of the GDP during the first quarter of 2017-18, 2018-19 and 2019-20, the real GDP in the corresponding period last year contracted by 3.46 percent. As opposed to that, the y-o-y GDP expansion was to the tune of 20.08 percent in Q1 of 2021-22. Thus, the real GDP growth changes with the change in base and also the base year.&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;All the high frequency indicators aren&amp;rsquo;t moving in the same direction&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;After the completion of the first quarter of the current fiscal, the Ministry of Statistics and Programme Implementation (MoSPI) has provided the first estimate of the Q1&amp;rsquo;s GDP. On the basis of about &lt;a href=&quot;/upload/files/High%20frequency%20indicators.png&quot;&gt;20 high frequency indicators&lt;/a&gt;, the sector-wise estimates have been compiled by the ministry. Out of the 20 indicators, in the case of &amp;#39;total telephone subscribers&amp;#39; &lt;em&gt;(-2.5 percent)&lt;/em&gt;, &amp;#39;cargo handled at airports&amp;#39; &lt;em&gt;(-1.7 percent)&lt;/em&gt;, and &amp;#39;Index of Industrial Production (IIP) pertaining to metallic minerals&amp;#39; &lt;em&gt;(-6.5 percent)&lt;/em&gt;, there has been y-o-y contractions in Q1 of 2022-23 as opposed to positive growths in the corresponding period last year. &amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;In the case of certain high frequency indicators like &amp;#39;production of cement&amp;#39;, &amp;#39;consumption of steel&amp;#39;, &amp;#39;sales of commercial vehicles&amp;#39;, &amp;#39;purchase of private vehicles&amp;#39;, &amp;#39;cargo handled at major sea ports&amp;#39;, &amp;#39;passengers handled at airports&amp;#39;, &amp;#39;IIP pertaining to mining and manufacturing&amp;#39;, &amp;#39;net tonne kilometer - railways&amp;#39;, etc., the y-o-y percentage growth has reduced between Q1 of 2021-22 and Q1 of 2022-23.&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Two-wheeler sale to the average Indian citizen still down&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Some economists tend to use the data on two-wheeler sale, which is provided by the industry body &lt;a href=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot;&gt;Society of Indian Automobile Manufacturers (SIAM)&lt;/a&gt;. However, the SIAM data is related to the number of units which is &lt;a href=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot;&gt;sold by the manufacturers to dealers&lt;/a&gt; across the country. During economic slowdown, dealers may be unable to sell the products they purchase from manufacturers, which could lead to building up of inventory with the former. Hence, the SIAM data may not capture the real situation i.e., the number of two-wheelers bought by the final consumers.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Chart%202%20Two%20wheeler%20vehicles%20registered%20in%20Q1%20of%20various%20years.png&quot; style=&quot;height:555px; width:780px&quot; /&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source: &lt;/strong&gt;Vahan registration website,&amp;nbsp;Ministry of Road Transport and Highways,&amp;nbsp;please &lt;a href=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;br /&gt;
&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;
&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Instead of using SIAM data on two-wheeler sale, the data&amp;nbsp;that is provided by &lt;a href=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot;&gt;Vahan dashboard&lt;/a&gt; on vehicle registration, is used in the present piece. As compared to the 3-year average of the number of two-wheelers &lt;em&gt;(sum of non-transport and transport-two-wheelers) &lt;/em&gt;registered during April-June of 2017, 2018 and 2019, the number of two-wheeler vehicles registered in the first quarters of 2020, 2021 and 2022 has been lower. In short, if the number of two-wheelers registered is used for analysis, then it shows that the purchasing power of the average Indian consumer has still not reached the pre-pandemic level.&amp;nbsp;Please have a look at chart-2.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Whatever happened to consumer demand?&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;The Private Final Consumption Expenditure (PFCE) &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;represents the value of goods and services&lt;/a&gt; &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;consumed by the households&lt;/a&gt; and &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;the private non-profit institutions&lt;/a&gt; &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;serving households (NPISHs)&lt;/a&gt; in the period extending from the beginning of April of one calendar year to the end of March of the next. In 2021-22 &lt;em&gt;(provisional estimates)&lt;/em&gt;, PFCE&amp;nbsp;i.e., final consumer spending &lt;em&gt;(at 2011-12 prices) &lt;/em&gt;as a proportion of GDP &lt;em&gt;(at 2011-12 prices) &lt;/em&gt;was 56.85 percent. Therefore, the revival of consumer demand is essential for boosting economic growth. The y-o-y growth rates of PFCE &lt;em&gt;(at constant prices) &lt;/em&gt;were 8.88 percent in 2017-18, 6.61 percent in 2018-19, and 4.45 percent in 2019-20 &lt;em&gt;(2nd revised estimates)&lt;/em&gt;. However, the y-o-y growth rates of PFCE &lt;em&gt;(at constant price)&lt;/em&gt; dipped to -6.0 percent in 2020-21 &lt;em&gt;(1st RE)&lt;/em&gt; but bounced back to 7.91 percent in 2021-22 &lt;em&gt;(PE)&lt;/em&gt;. Please see table-2.&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Table 2: Provisional Estimates of National Income and Expenditure Components of GDP, various years (at 2011- 12 Prices)&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Table%202%20Provisional%20Estimates%20of%20National%20Income%20and%20Expenditure%20Components%20of%20GDP%20various%20years%20at%202011-12%20Prices.png&quot; style=&quot;height:523px; width:1050px&quot; /&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source:&lt;/strong&gt; &lt;strong&gt;**&lt;/strong&gt; Press Note on Provisional Estimates of Annual National Income 2021-22 and Quarterly Estimates of Gross Domestic Product for the Fourth Quarter (Q4) of 2021-22, released on 31 May 2022, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;#&lt;/strong&gt; Press Note on First Advance Estimates of National Income 2020-21, released on 7 January, 2021, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;## &lt;/strong&gt;Press Note on First Advance Estimates of National Income 2019-20, released on 7 January, 2020, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;#* &lt;/strong&gt;Press Note on First Advance Estimates of National Income 2018-19, released on 7 January, 2019, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;^* &lt;/strong&gt;Press Note on First Advance Estimates of National Income 2017-18, released on 5 January, 2018, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;^^ &lt;/strong&gt;Press Note on Provisional Estimates of National Income 2016-17, released on 31 May, 2017, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1aiEDfCYkTynV-ucq46fwJKffZosApMMk/edit?usp=sharing&amp;amp;ouid=112233925171588304692&amp;amp;rtpof=true&amp;amp;sd=true&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;
&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;As compared to the 3-year average of the PFCE &lt;em&gt;(at constant prices)&lt;/em&gt; pertaining to 2017-18, 2018-19, and 2019-20 &lt;em&gt;(2nd RE)&lt;/em&gt;, the real PFCE in 2020-21 &lt;em&gt;(1st RE)&lt;/em&gt; and 2021-22 &lt;em&gt;(PE)&lt;/em&gt; grew by -1.25 percent and 6.56 percent, respectively. The advance estimates of GDP &lt;em&gt;(at 2011-12 prices) &lt;/em&gt;for 2022-23 would be released in January next year. Till then, we will have to wait for commenting further about the sustained growth of consumer demand. &lt;a href=&quot;https://www.mse.ac.in/wp-content/uploads/2020/02/Ind-exp.-dec-13-Mind-the-statistics-gap.pdf&quot;&gt;Experts have suggested&lt;/a&gt; that in order to gauge consumer demand and income poverty, consumption expenditure survey of households by the National Statistical Office (NSO) needs to be done and the results are required to be published along with the release of&amp;nbsp;unit-level data. It is worth noting that the &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;gap between the National Accounts Statistics (NAS)&lt;/a&gt; &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;estimates of PFCE&lt;/a&gt; and the &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;National Sample Survey (NSS)&lt;/a&gt; &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;estimates of household consumption expenditure&lt;/a&gt;&amp;nbsp;&lt;em&gt;(aggregated at the national level)&lt;/em&gt; has grown progressively over the years.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;An alternative perspective&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;As said earlier, the y-o-y growth of GDP at constant prices during Q1 of 2022-23 was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;13.5 percent&lt;/a&gt;, whereas the y-o-y growth of GDP at current prices during the same period was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;26.7 percent&lt;/a&gt;. It means that the GDP deflator grew y-o-y by 13.2 percent.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Likewise, the y-o-y growth of real Gross Value Added (GVA) at basic prices during Q1 of 2022-23 was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;12.7 percent&lt;/a&gt;, whereas the y-o-y growth of GVA at basic prices at current prices during the same period was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;26.5 percent&lt;/a&gt;. So, the GVA deflator grew y-o-y by 13.8 percent.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;In order to arrive at GDP at constant prices from GDP at current prices, one needs a deflator. In the case of &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;single deflation method&lt;/a&gt;, a common price deflator is utilised to adjust both input and output prices. For &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;double deflation method&lt;/a&gt;, one needs two different deflators for adjusting input and output prices. In India, double deflation is done for agriculture, and mining and quarrying, whereas single deflation is used for other sectors. Thus, in &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;our country, a mix&lt;/a&gt; of single and double deflation methods is used. &amp;nbsp;&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;A &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;recent analysis&lt;/a&gt; by Pragya Srivastava, published in Livemint.com, tells us that the GDP deflator on an average reflects 70 percent of the Wholesale Price Index (WPI) and 30 percent of the Consumer Price Index (CPI). As per HSBC Global Research, input prices &lt;em&gt;(reflected by WPI rise) &lt;/em&gt;in the Q1 of 2022-23 have grown faster than the output prices &lt;em&gt;(indicated by the CPI increase)&lt;/em&gt;, possibly leading to an underestimation of GVA growth, and therefore GDP growth. Remember, &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;GDP at market prices&lt;/a&gt; is derived as the &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;sum of the GVA at basic prices&lt;/a&gt;, &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;plus all taxes on products&lt;/a&gt;, &lt;a href=&quot;https://pib.gov.in/PressReleasePage.aspx?PRID=1723153&quot;&gt;less all subsidies on products&lt;/a&gt;. In the case of single deflation method, if input &lt;em&gt;(indicated by WPI) &lt;/em&gt;and output &lt;em&gt;(reflected by CPI)&lt;/em&gt; prices expand at different rates, then it may cause overestimation or underestimation of economic performance.&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;A technical discussion by Jyoti Sharma &lt;em&gt;(please click &lt;a href=&quot;https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html&quot;&gt;here&lt;/a&gt; and &lt;a href=&quot;https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html&quot;&gt;here&lt;/a&gt; to access)&lt;/em&gt; informs us that ideally, the GDP deflator of the MoSPI lies in the range {min. (CPI, WPI), max. (CPI, WPI)} i.e., the deflator must fall in the range defined by minimum of CPI and WPI and maximum of CPI and WPI for a sector. She proposes that in the case of double deflation method, CPI as a deflator for output value, and WPI for input value should be used. Instead of going for mix method, which India uses, one should go for either single or double deflation method across the sectors and sub-sectors in order to compare the trends across sectors.&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;&lt;em&gt;References:&amp;nbsp;&lt;/em&gt;&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2022-23, released on 31 August, 2022, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2021-22, released on 31 August, 2021, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2021-22.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2020-21, released on 31 August, 2020, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2019-20, released on 30 August, 2019, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2019-20.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Vahan registration website,&amp;nbsp;Ministry of Road Transport and Highways,&amp;nbsp;please &lt;a href=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Provisional Estimates of Annual National Income 2021-22 and Quarterly Estimates of Gross Domestic Product for the Fourth Quarter (Q4) of 2021-22, released on 31 May 2022, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2020-21, released on 7 January, 2021, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2019-20, released on 7 January, 2020, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2018-19, released on 7 January, 2019, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2017-18, released on 5 January, 2018, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Provisional Estimates of National Income 2016-17, released on 31 May, 2017, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press release: Provisional estimates of Annual National Income, 2020-21 and Quarterly estimates (Q4) of Gross Domestic Product, 2020-21, Ministry of Statistics &amp;amp; Programme Implementation, Press Information Bureau, released on 31 May, 2021, please click &lt;a href=&quot;https://pib.gov.in/PressReleasePage.aspx?PRID=1723153&quot;&gt;here&lt;/a&gt; and &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;here&lt;/a&gt; to access &amp;nbsp;&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Estimates of Food Consumption Expenditure from Household Surveys and National Accounts -AC Kulshreshtha and Aloke Kar, Central Statistical Organisation (CSO), please &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Is the GDP number an underestimate? -Pragya Srivastava, Livemint.com, 2 September, 2022, please &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html &quot;&gt;click here&lt;/a&gt; to access&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;The Real Story Behind India&amp;rsquo;s Two Wheeler Sales or Rather the Lack of It -Vivek Kaul, 19 November, 2020, please &lt;a href=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Mind the statistics gap -C Rangarajan and S Mahendra Dev, The Indian Express, 13 December, 2019, please &lt;a href=&quot;https://bit.ly/3Dsq9y2&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;India&amp;rsquo;s GDP: Deflating the right way -Jyoti Sharma, Ideas for India, 12 October, 2017, please &lt;a href=&quot;https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html&quot;&gt;click here&lt;/a&gt; to access&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;India&amp;rsquo;s GDP: Deflating the right way -Jyoti Sharma, Livemint.com, 12 October, 2017, please &lt;a href=&quot;https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html &quot;&gt;click here&lt;/a&gt; to access&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Image Courtesy: Inclusive Media for Change/ Shambhu Ghatak&lt;/strong&gt;&lt;/p&gt;
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$metaTitle = &#039;NEWS ALERTS | Realistic analysis shows that the Indian economy has simply taken little steps in Q1 instead of a quantum leap&#039;
$metaKeywords = &#039;Consumer Price Index,CPI,GDP at 2011-12 prices,GDP at constant prices,GDP at current prices,GDP deflation,Gross Value Added,GVA at basic prices,Real GDP growth,Wholesale Price Index,WPI&#039;
$metaDesc = &#039;There is euphoria abound about India&amp;#39;s growth performance during the first quarter of the current fiscal. As compared to the corresponding period last year, the year-on-year (y-o-y) GDP growth in the first quarter (Q1) of 2022-23 is down. However, one...&#039;
$disp = &#039;&lt;p style=&quot;text-align:justify&quot;&gt;There is euphoria abound about India&amp;#39;s growth performance during the first quarter of the current fiscal. As compared to the corresponding period last year, the year-on-year (y-o-y) GDP growth in the first quarter (Q1) of 2022-23 is down. However, one should take into account the fact that the high growth performance of the real GDP in Q1 of 2021-22 was due to the low base in the corresponding period of the first pandemic year. The optimism surrounding y-o-y&amp;nbsp;real GDP growth in the first quarter this year therefore appears to be natural.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;On further delving into the data, it can be discovered that after two years of the pandemic, the GDP in the Q1 of the current fiscal, crossed the GDP figure corresponding to the Q1 of 2019-20. Please see chart-1.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Chart%201%20Quarterly%20Estimates%20of%20Expenditure%20Components%20of%20GDP%20for%20Q1%20at%202011-12%20Prices%20in%20Rs.%20Crore%281%29.png&quot; style=&quot;height:687px; width:997px&quot; /&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source: **&lt;/strong&gt; Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2022-23, released on 31 August, 2022, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;*&lt;/strong&gt; Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2021-22, released on 31 August, 2021, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2021-22.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2021-22.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;##&lt;/strong&gt; Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2020-21, released on 31 August, 2020, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;# &lt;/strong&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2019-20, released on 30 August, 2019, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2019-20.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2019-20.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot; title=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Growth in the real GDP is vital because it provides the government with additional revenue to spend. When the economy expands, it signifies that the economic activities are reaching the level as they existed during the normal times i.e., before the pandemic had struck. With the return of the economy to normalcy, employment generation is expected to take place. Employment creation can lead to a resurgence in effective demand i.e., purchasing power.&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Measuring real GDP growth after 2 years of the pandemic&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;The GDP at constant prices expanded by &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022.pdf&quot;&gt;4.1 percent in the last quarter (Q4)&lt;/a&gt; of 2021-22. While the real economy grew y-o-y by 13.51 percent in the Q1 as compared to a y-o-y real GDP growth of 20.08 percent in the corresponding period last year, a different picture emerges when the base is shifted to Q1 GDP in the pre-covid times. As compared to the 3-year average of the Q1 GDP pertaining to 2017-18, 2018-19, and 2019-20, the real GDP in the first quarter of the current fiscal expanded by 9.58 percent i.e., less than the y-o-y growth of 13.51 percent. Please take a&amp;nbsp;look at table-1.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Table 1: Quarterly Estimates of Expenditure Components of GDP for Q1 (April-June) at 2011-12 Prices, various years (in Rs. Crore)&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Table%201%20Quarterly%20Estimates%20of%20Expenditure%20Components%20of%20GDP%20for%20Q1%20at%202011-12%20Prices%20in%20Rs.%20Crore.png&quot; style=&quot;height:309px; width:874px&quot; /&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source: &lt;/strong&gt;Same as chart-1&lt;br /&gt;&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot; title=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;As compared to the 3-year average of the GDP during the first quarter of 2017-18, 2018-19 and 2019-20, the real GDP in the corresponding period last year contracted by 3.46 percent. As opposed to that, the y-o-y GDP expansion was to the tune of 20.08 percent in Q1 of 2021-22. Thus, the real GDP growth changes with the change in base and also the base year.&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;All the high frequency indicators aren&amp;rsquo;t moving in the same direction&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;After the completion of the first quarter of the current fiscal, the Ministry of Statistics and Programme Implementation (MoSPI) has provided the first estimate of the Q1&amp;rsquo;s GDP. On the basis of about &lt;a href=&quot;/upload/files/High%20frequency%20indicators.png&quot; title=&quot;/upload/files/High%20frequency%20indicators.png&quot;&gt;20 high frequency indicators&lt;/a&gt;, the sector-wise estimates have been compiled by the ministry. Out of the 20 indicators, in the case of &amp;#39;total telephone subscribers&amp;#39; &lt;em&gt;(-2.5 percent)&lt;/em&gt;, &amp;#39;cargo handled at airports&amp;#39; &lt;em&gt;(-1.7 percent)&lt;/em&gt;, and &amp;#39;Index of Industrial Production (IIP) pertaining to metallic minerals&amp;#39; &lt;em&gt;(-6.5 percent)&lt;/em&gt;, there has been y-o-y contractions in Q1 of 2022-23 as opposed to positive growths in the corresponding period last year. &amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;In the case of certain high frequency indicators like &amp;#39;production of cement&amp;#39;, &amp;#39;consumption of steel&amp;#39;, &amp;#39;sales of commercial vehicles&amp;#39;, &amp;#39;purchase of private vehicles&amp;#39;, &amp;#39;cargo handled at major sea ports&amp;#39;, &amp;#39;passengers handled at airports&amp;#39;, &amp;#39;IIP pertaining to mining and manufacturing&amp;#39;, &amp;#39;net tonne kilometer - railways&amp;#39;, etc., the y-o-y percentage growth has reduced between Q1 of 2021-22 and Q1 of 2022-23.&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Two-wheeler sale to the average Indian citizen still down&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Some economists tend to use the data on two-wheeler sale, which is provided by the industry body &lt;a href=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot; title=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot;&gt;Society of Indian Automobile Manufacturers (SIAM)&lt;/a&gt;. However, the SIAM data is related to the number of units which is &lt;a href=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot; title=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot;&gt;sold by the manufacturers to dealers&lt;/a&gt; across the country. During economic slowdown, dealers may be unable to sell the products they purchase from manufacturers, which could lead to building up of inventory with the former. Hence, the SIAM data may not capture the real situation i.e., the number of two-wheelers bought by the final consumers.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Chart%202%20Two%20wheeler%20vehicles%20registered%20in%20Q1%20of%20various%20years.png&quot; style=&quot;height:555px; width:780px&quot; /&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source: &lt;/strong&gt;Vahan registration website,&amp;nbsp;Ministry of Road Transport and Highways,&amp;nbsp;please &lt;a href=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot; title=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;br /&gt;&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot; title=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Instead of using SIAM data on two-wheeler sale, the data&amp;nbsp;that is provided by &lt;a href=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot; title=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot;&gt;Vahan dashboard&lt;/a&gt; on vehicle registration, is used in the present piece. As compared to the 3-year average of the number of two-wheelers &lt;em&gt;(sum of non-transport and transport-two-wheelers) &lt;/em&gt;registered during April-June of 2017, 2018 and 2019, the number of two-wheeler vehicles registered in the first quarters of 2020, 2021 and 2022 has been lower. In short, if the number of two-wheelers registered is used for analysis, then it shows that the purchasing power of the average Indian consumer has still not reached the pre-pandemic level.&amp;nbsp;Please have a look at chart-2.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Whatever happened to consumer demand?&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;The Private Final Consumption Expenditure (PFCE) &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;represents the value of goods and services&lt;/a&gt; &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;consumed by the households&lt;/a&gt; and &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;the private non-profit institutions&lt;/a&gt; &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;serving households (NPISHs)&lt;/a&gt; in the period extending from the beginning of April of one calendar year to the end of March of the next. In 2021-22 &lt;em&gt;(provisional estimates)&lt;/em&gt;, PFCE&amp;nbsp;i.e., final consumer spending &lt;em&gt;(at 2011-12 prices) &lt;/em&gt;as a proportion of GDP &lt;em&gt;(at 2011-12 prices) &lt;/em&gt;was 56.85 percent. Therefore, the revival of consumer demand is essential for boosting economic growth. The y-o-y growth rates of PFCE &lt;em&gt;(at constant prices) &lt;/em&gt;were 8.88 percent in 2017-18, 6.61 percent in 2018-19, and 4.45 percent in 2019-20 &lt;em&gt;(2nd revised estimates)&lt;/em&gt;. However, the y-o-y growth rates of PFCE &lt;em&gt;(at constant price)&lt;/em&gt; dipped to -6.0 percent in 2020-21 &lt;em&gt;(1st RE)&lt;/em&gt; but bounced back to 7.91 percent in 2021-22 &lt;em&gt;(PE)&lt;/em&gt;. Please see table-2.&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Table 2: Provisional Estimates of National Income and Expenditure Components of GDP, various years (at 2011- 12 Prices)&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Table%202%20Provisional%20Estimates%20of%20National%20Income%20and%20Expenditure%20Components%20of%20GDP%20various%20years%20at%202011-12%20Prices.png&quot; style=&quot;height:523px; width:1050px&quot; /&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source:&lt;/strong&gt; &lt;strong&gt;**&lt;/strong&gt; Press Note on Provisional Estimates of Annual National Income 2021-22 and Quarterly Estimates of Gross Domestic Product for the Fourth Quarter (Q4) of 2021-22, released on 31 May 2022, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;#&lt;/strong&gt; Press Note on First Advance Estimates of National Income 2020-21, released on 7 January, 2021, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;## &lt;/strong&gt;Press Note on First Advance Estimates of National Income 2019-20, released on 7 January, 2020, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;#* &lt;/strong&gt;Press Note on First Advance Estimates of National Income 2018-19, released on 7 January, 2019, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;^* &lt;/strong&gt;Press Note on First Advance Estimates of National Income 2017-18, released on 5 January, 2018, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;^^ &lt;/strong&gt;Press Note on Provisional Estimates of National Income 2016-17, released on 31 May, 2017, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1aiEDfCYkTynV-ucq46fwJKffZosApMMk/edit?usp=sharing&amp;amp;ouid=112233925171588304692&amp;amp;rtpof=true&amp;amp;sd=true&quot; title=&quot;https://docs.google.com/spreadsheets/d/1aiEDfCYkTynV-ucq46fwJKffZosApMMk/edit?usp=sharing&amp;amp;ouid=112233925171588304692&amp;amp;rtpof=true&amp;amp;sd=true&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;As compared to the 3-year average of the PFCE &lt;em&gt;(at constant prices)&lt;/em&gt; pertaining to 2017-18, 2018-19, and 2019-20 &lt;em&gt;(2nd RE)&lt;/em&gt;, the real PFCE in 2020-21 &lt;em&gt;(1st RE)&lt;/em&gt; and 2021-22 &lt;em&gt;(PE)&lt;/em&gt; grew by -1.25 percent and 6.56 percent, respectively. The advance estimates of GDP &lt;em&gt;(at 2011-12 prices) &lt;/em&gt;for 2022-23 would be released in January next year. Till then, we will have to wait for commenting further about the sustained growth of consumer demand. &lt;a href=&quot;https://www.mse.ac.in/wp-content/uploads/2020/02/Ind-exp.-dec-13-Mind-the-statistics-gap.pdf&quot; title=&quot;https://www.mse.ac.in/wp-content/uploads/2020/02/Ind-exp.-dec-13-Mind-the-statistics-gap.pdf&quot;&gt;Experts have suggested&lt;/a&gt; that in order to gauge consumer demand and income poverty, consumption expenditure survey of households by the National Statistical Office (NSO) needs to be done and the results are required to be published along with the release of&amp;nbsp;unit-level data. It is worth noting that the &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;gap between the National Accounts Statistics (NAS)&lt;/a&gt; &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;estimates of PFCE&lt;/a&gt; and the &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;National Sample Survey (NSS)&lt;/a&gt; &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;estimates of household consumption expenditure&lt;/a&gt;&amp;nbsp;&lt;em&gt;(aggregated at the national level)&lt;/em&gt; has grown progressively over the years.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;An alternative perspective&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;As said earlier, the y-o-y growth of GDP at constant prices during Q1 of 2022-23 was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot; title=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;13.5 percent&lt;/a&gt;, whereas the y-o-y growth of GDP at current prices during the same period was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot; title=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;26.7 percent&lt;/a&gt;. It means that the GDP deflator grew y-o-y by 13.2 percent.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Likewise, the y-o-y growth of real Gross Value Added (GVA) at basic prices during Q1 of 2022-23 was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot; title=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;12.7 percent&lt;/a&gt;, whereas the y-o-y growth of GVA at basic prices at current prices during the same period was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot; title=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;26.5 percent&lt;/a&gt;. So, the GVA deflator grew y-o-y by 13.8 percent.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;In order to arrive at GDP at constant prices from GDP at current prices, one needs a deflator. In the case of &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot; title=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;single deflation method&lt;/a&gt;, a common price deflator is utilised to adjust both input and output prices. For &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot; title=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;double deflation method&lt;/a&gt;, one needs two different deflators for adjusting input and output prices. In India, double deflation is done for agriculture, and mining and quarrying, whereas single deflation is used for other sectors. Thus, in &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot; title=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;our country, a mix&lt;/a&gt; of single and double deflation methods is used. &amp;nbsp;&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;A &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot; title=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;recent analysis&lt;/a&gt; by Pragya Srivastava, published in Livemint.com, tells us that the GDP deflator on an average reflects 70 percent of the Wholesale Price Index (WPI) and 30 percent of the Consumer Price Index (CPI). As per HSBC Global Research, input prices &lt;em&gt;(reflected by WPI rise) &lt;/em&gt;in the Q1 of 2022-23 have grown faster than the output prices &lt;em&gt;(indicated by the CPI increase)&lt;/em&gt;, possibly leading to an underestimation of GVA growth, and therefore GDP growth. Remember, &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot; title=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;GDP at market prices&lt;/a&gt; is derived as the &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot; title=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;sum of the GVA at basic prices&lt;/a&gt;, &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot; title=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;plus all taxes on products&lt;/a&gt;, &lt;a href=&quot;https://pib.gov.in/PressReleasePage.aspx?PRID=1723153&quot; title=&quot;https://pib.gov.in/PressReleasePage.aspx?PRID=1723153&quot;&gt;less all subsidies on products&lt;/a&gt;. In the case of single deflation method, if input &lt;em&gt;(indicated by WPI) &lt;/em&gt;and output &lt;em&gt;(reflected by CPI)&lt;/em&gt; prices expand at different rates, then it may cause overestimation or underestimation of economic performance.&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;A technical discussion by Jyoti Sharma &lt;em&gt;(please click &lt;a href=&quot;https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html&quot; title=&quot;https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html&quot;&gt;here&lt;/a&gt; and &lt;a href=&quot;https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html&quot; title=&quot;https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html&quot;&gt;here&lt;/a&gt; to access)&lt;/em&gt; informs us that ideally, the GDP deflator of the MoSPI lies in the range {min. (CPI, WPI), max. (CPI, WPI)} i.e., the deflator must fall in the range defined by minimum of CPI and WPI and maximum of CPI and WPI for a sector. She proposes that in the case of double deflation method, CPI as a deflator for output value, and WPI for input value should be used. Instead of going for mix method, which India uses, one should go for either single or double deflation method across the sectors and sub-sectors in order to compare the trends across sectors.&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;&lt;em&gt;References:&amp;nbsp;&lt;/em&gt;&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2022-23, released on 31 August, 2022, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2021-22, released on 31 August, 2021, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2021-22.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2021-22.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2020-21, released on 31 August, 2020, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2019-20, released on 30 August, 2019, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2019-20.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2019-20.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Vahan registration website,&amp;nbsp;Ministry of Road Transport and Highways,&amp;nbsp;please &lt;a href=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot; title=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Provisional Estimates of Annual National Income 2021-22 and Quarterly Estimates of Gross Domestic Product for the Fourth Quarter (Q4) of 2021-22, released on 31 May 2022, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2020-21, released on 7 January, 2021, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2019-20, released on 7 January, 2020, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2018-19, released on 7 January, 2019, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2017-18, released on 5 January, 2018, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Provisional Estimates of National Income 2016-17, released on 31 May, 2017, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press release: Provisional estimates of Annual National Income, 2020-21 and Quarterly estimates (Q4) of Gross Domestic Product, 2020-21, Ministry of Statistics &amp;amp; Programme Implementation, Press Information Bureau, released on 31 May, 2021, please click &lt;a href=&quot;https://pib.gov.in/PressReleasePage.aspx?PRID=1723153&quot; title=&quot;https://pib.gov.in/PressReleasePage.aspx?PRID=1723153&quot;&gt;here&lt;/a&gt; and &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot; title=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;here&lt;/a&gt; to access &amp;nbsp;&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Estimates of Food Consumption Expenditure from Household Surveys and National Accounts -AC Kulshreshtha and Aloke Kar, Central Statistical Organisation (CSO), please &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Is the GDP number an underestimate? -Pragya Srivastava, Livemint.com, 2 September, 2022, please &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot; title=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;click here&lt;/a&gt; to access&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;The Real Story Behind India&amp;rsquo;s Two Wheeler Sales or Rather the Lack of It -Vivek Kaul, 19 November, 2020, please &lt;a href=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot; title=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Mind the statistics gap -C Rangarajan and S Mahendra Dev, The Indian Express, 13 December, 2019, please &lt;a href=&quot;https://bit.ly/3Dsq9y2&quot; title=&quot;https://bit.ly/3Dsq9y2&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;India&amp;rsquo;s GDP: Deflating the right way -Jyoti Sharma, Ideas for India, 12 October, 2017, please &lt;a href=&quot;https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html&quot; title=&quot;https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html&quot;&gt;click here&lt;/a&gt; to access&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;India&amp;rsquo;s GDP: Deflating the right way -Jyoti Sharma, Livemint.com, 12 October, 2017, please &lt;a href=&quot;https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html&quot; title=&quot;https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html&quot;&gt;click here&lt;/a&gt; to access&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Image Courtesy: Inclusive Media for Change/ Shambhu Ghatak&lt;/strong&gt;&lt;/p&gt;&#039;
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                <strong>Realistic analysis shows that the Indian economy has simply taken little steps in Q1 instead of a quantum leap</strong></h1>
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                <p style="text-align:justify">There is euphoria abound about India&#39;s growth performance during the first quarter of the current fiscal. As compared to the corresponding period last year, the year-on-year (y-o-y) GDP growth in the first quarter (Q1) of 2022-23 is down. However, one should take into account the fact that the high growth performance of the real GDP in Q1 of 2021-22 was due to the low base in the corresponding period of the first pandemic year. The optimism surrounding y-o-y&nbsp;real GDP growth in the first quarter this year therefore appears to be natural.&nbsp;</p><p style="text-align:justify">On further delving into the data, it can be discovered that after two years of the pandemic, the GDP in the Q1 of the current fiscal, crossed the GDP figure corresponding to the Q1 of 2019-20. Please see chart-1.&nbsp;</p><p style="text-align:justify"><img alt="" src="/upload/images/Chart%201%20Quarterly%20Estimates%20of%20Expenditure%20Components%20of%20GDP%20for%20Q1%20at%202011-12%20Prices%20in%20Rs.%20Crore%281%29.png" style="height:687px; width:997px" /></p><p style="text-align:justify"><em><strong>Source: **</strong> Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2022-23, released on 31 August, 2022, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2022-23.pdf" title="/upload/files/PRESS_NOTE-Q1_2022-23.pdf">click here</a> to access&nbsp;</em></p><p style="text-align:justify"><em><strong>*</strong> Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2021-22, released on 31 August, 2021, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2021-22.pdf" title="/upload/files/PRESS_NOTE-Q1_2021-22.pdf">click here</a> to access &nbsp;</em></p><p style="text-align:justify"><em><strong>##</strong> Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2020-21, released on 31 August, 2020, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf" title="/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf">click here</a> to access&nbsp;</em></p><p style="text-align:justify"><em><strong># </strong>Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2019-20, released on 30 August, 2019, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2019-20.pdf" title="/upload/files/PRESS_NOTE-Q1_2019-20.pdf">click here</a> to access&nbsp;</em></p><p style="text-align:justify"><em><strong>Note: </strong>Kindly <a href="https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423" title="https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423">click here</a> to access the data in a spreadsheet</em><br /><strong>---</strong></p><p style="text-align:justify">Growth in the real GDP is vital because it provides the government with additional revenue to spend. When the economy expands, it signifies that the economic activities are reaching the level as they existed during the normal times i.e., before the pandemic had struck. With the return of the economy to normalcy, employment generation is expected to take place. Employment creation can lead to a resurgence in effective demand i.e., purchasing power.</p><p style="text-align:justify"><strong>Measuring real GDP growth after 2 years of the pandemic</strong></p><p style="text-align:justify">The GDP at constant prices expanded by <a href="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022.pdf" title="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022.pdf">4.1 percent in the last quarter (Q4)</a> of 2021-22. While the real economy grew y-o-y by 13.51 percent in the Q1 as compared to a y-o-y real GDP growth of 20.08 percent in the corresponding period last year, a different picture emerges when the base is shifted to Q1 GDP in the pre-covid times. As compared to the 3-year average of the Q1 GDP pertaining to 2017-18, 2018-19, and 2019-20, the real GDP in the first quarter of the current fiscal expanded by 9.58 percent i.e., less than the y-o-y growth of 13.51 percent. Please take a&nbsp;look at table-1.&nbsp;</p><p style="text-align:justify"><strong>Table 1: Quarterly Estimates of Expenditure Components of GDP for Q1 (April-June) at 2011-12 Prices, various years (in Rs. Crore)</strong></p><p style="text-align:justify"><img alt="" src="/upload/images/Table%201%20Quarterly%20Estimates%20of%20Expenditure%20Components%20of%20GDP%20for%20Q1%20at%202011-12%20Prices%20in%20Rs.%20Crore.png" style="height:309px; width:874px" /></p><p style="text-align:justify"><em><strong>Source: </strong>Same as chart-1<br /><strong>Note: </strong>Kindly <a href="https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423" title="https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423">click here</a> to access the data in a spreadsheet</em><br /><strong>---</strong></p><p style="text-align:justify">As compared to the 3-year average of the GDP during the first quarter of 2017-18, 2018-19 and 2019-20, the real GDP in the corresponding period last year contracted by 3.46 percent. As opposed to that, the y-o-y GDP expansion was to the tune of 20.08 percent in Q1 of 2021-22. Thus, the real GDP growth changes with the change in base and also the base year.</p><p style="text-align:justify"><strong>All the high frequency indicators aren&rsquo;t moving in the same direction</strong></p><p style="text-align:justify">After the completion of the first quarter of the current fiscal, the Ministry of Statistics and Programme Implementation (MoSPI) has provided the first estimate of the Q1&rsquo;s GDP. On the basis of about <a href="/upload/files/High%20frequency%20indicators.png" title="/upload/files/High%20frequency%20indicators.png">20 high frequency indicators</a>, the sector-wise estimates have been compiled by the ministry. Out of the 20 indicators, in the case of &#39;total telephone subscribers&#39; <em>(-2.5 percent)</em>, &#39;cargo handled at airports&#39; <em>(-1.7 percent)</em>, and &#39;Index of Industrial Production (IIP) pertaining to metallic minerals&#39; <em>(-6.5 percent)</em>, there has been y-o-y contractions in Q1 of 2022-23 as opposed to positive growths in the corresponding period last year. &nbsp;</p><p style="text-align:justify">In the case of certain high frequency indicators like &#39;production of cement&#39;, &#39;consumption of steel&#39;, &#39;sales of commercial vehicles&#39;, &#39;purchase of private vehicles&#39;, &#39;cargo handled at major sea ports&#39;, &#39;passengers handled at airports&#39;, &#39;IIP pertaining to mining and manufacturing&#39;, &#39;net tonne kilometer - railways&#39;, etc., the y-o-y percentage growth has reduced between Q1 of 2021-22 and Q1 of 2022-23.</p><p style="text-align:justify"><strong>Two-wheeler sale to the average Indian citizen still down</strong></p><p style="text-align:justify">Some economists tend to use the data on two-wheeler sale, which is provided by the industry body <a href="https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/" title="https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/">Society of Indian Automobile Manufacturers (SIAM)</a>. However, the SIAM data is related to the number of units which is <a href="https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/" title="https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/">sold by the manufacturers to dealers</a> across the country. During economic slowdown, dealers may be unable to sell the products they purchase from manufacturers, which could lead to building up of inventory with the former. Hence, the SIAM data may not capture the real situation i.e., the number of two-wheelers bought by the final consumers.&nbsp;</p><p style="text-align:justify"><img alt="" src="/upload/images/Chart%202%20Two%20wheeler%20vehicles%20registered%20in%20Q1%20of%20various%20years.png" style="height:555px; width:780px" /></p><p style="text-align:justify"><em><strong>Source: </strong>Vahan registration website,&nbsp;Ministry of Road Transport and Highways,&nbsp;please <a href="https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml" title="https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml">click here</a> to access&nbsp;<br /><strong>Note: </strong>Kindly <a href="https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423" title="https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423">click here</a> to access the data in a spreadsheet</em><br /><strong>---</strong></p><p style="text-align:justify">Instead of using SIAM data on two-wheeler sale, the data&nbsp;that is provided by <a href="https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml" title="https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml">Vahan dashboard</a> on vehicle registration, is used in the present piece. As compared to the 3-year average of the number of two-wheelers <em>(sum of non-transport and transport-two-wheelers) </em>registered during April-June of 2017, 2018 and 2019, the number of two-wheeler vehicles registered in the first quarters of 2020, 2021 and 2022 has been lower. In short, if the number of two-wheelers registered is used for analysis, then it shows that the purchasing power of the average Indian consumer has still not reached the pre-pandemic level.&nbsp;Please have a look at chart-2.&nbsp;</p><p style="text-align:justify"><strong>Whatever happened to consumer demand?</strong></p><p style="text-align:justify">The Private Final Consumption Expenditure (PFCE) <a href="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF" title="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">represents the value of goods and services</a> <a href="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF" title="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">consumed by the households</a> and <a href="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF" title="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">the private non-profit institutions</a> <a href="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF" title="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">serving households (NPISHs)</a> in the period extending from the beginning of April of one calendar year to the end of March of the next. In 2021-22 <em>(provisional estimates)</em>, PFCE&nbsp;i.e., final consumer spending <em>(at 2011-12 prices) </em>as a proportion of GDP <em>(at 2011-12 prices) </em>was 56.85 percent. Therefore, the revival of consumer demand is essential for boosting economic growth. The y-o-y growth rates of PFCE <em>(at constant prices) </em>were 8.88 percent in 2017-18, 6.61 percent in 2018-19, and 4.45 percent in 2019-20 <em>(2nd revised estimates)</em>. However, the y-o-y growth rates of PFCE <em>(at constant price)</em> dipped to -6.0 percent in 2020-21 <em>(1st RE)</em> but bounced back to 7.91 percent in 2021-22 <em>(PE)</em>. Please see table-2.</p><p style="text-align:justify"><strong>Table 2: Provisional Estimates of National Income and Expenditure Components of GDP, various years (at 2011- 12 Prices)</strong></p><p style="text-align:justify"><img alt="" src="/upload/images/Table%202%20Provisional%20Estimates%20of%20National%20Income%20and%20Expenditure%20Components%20of%20GDP%20various%20years%20at%202011-12%20Prices.png" style="height:523px; width:1050px" /></p><p style="text-align:justify"><em><strong>Source:</strong> <strong>**</strong> Press Note on Provisional Estimates of Annual National Income 2021-22 and Quarterly Estimates of Gross Domestic Product for the Fourth Quarter (Q4) of 2021-22, released on 31 May 2022, MoSPI, please <a href="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf" title="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf">click here</a> to access &nbsp;</em></p><p style="text-align:justify"><em><strong>#</strong> Press Note on First Advance Estimates of National Income 2020-21, released on 7 January, 2021, MoSPI, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf" title="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf">click here</a> to access &nbsp;</em></p><p style="text-align:justify"><em><strong>## </strong>Press Note on First Advance Estimates of National Income 2019-20, released on 7 January, 2020, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf" title="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf">click here</a> to access &nbsp;</em></p><p style="text-align:justify"><em><strong>#* </strong>Press Note on First Advance Estimates of National Income 2018-19, released on 7 January, 2019, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf" title="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf">click here</a> to access &nbsp;</em></p><p style="text-align:justify"><em><strong>^* </strong>Press Note on First Advance Estimates of National Income 2017-18, released on 5 January, 2018, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf" title="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf">click here</a> to access &nbsp;</em></p><p style="text-align:justify"><em><strong>^^ </strong>Press Note on Provisional Estimates of National Income 2016-17, released on 31 May, 2017, please <a href="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf" title="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf">click here</a> to access&nbsp;</em></p><p style="text-align:justify"><em><strong>Note: </strong>Kindly <a href="https://docs.google.com/spreadsheets/d/1aiEDfCYkTynV-ucq46fwJKffZosApMMk/edit?usp=sharing&amp;ouid=112233925171588304692&amp;rtpof=true&amp;sd=true" title="https://docs.google.com/spreadsheets/d/1aiEDfCYkTynV-ucq46fwJKffZosApMMk/edit?usp=sharing&amp;ouid=112233925171588304692&amp;rtpof=true&amp;sd=true">click here</a> to access the data in a spreadsheet</em><br /><strong>---</strong></p><p style="text-align:justify">As compared to the 3-year average of the PFCE <em>(at constant prices)</em> pertaining to 2017-18, 2018-19, and 2019-20 <em>(2nd RE)</em>, the real PFCE in 2020-21 <em>(1st RE)</em> and 2021-22 <em>(PE)</em> grew by -1.25 percent and 6.56 percent, respectively. The advance estimates of GDP <em>(at 2011-12 prices) </em>for 2022-23 would be released in January next year. Till then, we will have to wait for commenting further about the sustained growth of consumer demand. <a href="https://www.mse.ac.in/wp-content/uploads/2020/02/Ind-exp.-dec-13-Mind-the-statistics-gap.pdf" title="https://www.mse.ac.in/wp-content/uploads/2020/02/Ind-exp.-dec-13-Mind-the-statistics-gap.pdf">Experts have suggested</a> that in order to gauge consumer demand and income poverty, consumption expenditure survey of households by the National Statistical Office (NSO) needs to be done and the results are required to be published along with the release of&nbsp;unit-level data. It is worth noting that the <a href="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF" title="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">gap between the National Accounts Statistics (NAS)</a> <a href="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF" title="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">estimates of PFCE</a> and the <a href="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF" title="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">National Sample Survey (NSS)</a> <a href="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF" title="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">estimates of household consumption expenditure</a>&nbsp;<em>(aggregated at the national level)</em> has grown progressively over the years.&nbsp;</p><p style="text-align:justify"><strong>An alternative perspective</strong></p><p style="text-align:justify">As said earlier, the y-o-y growth of GDP at constant prices during Q1 of 2022-23 was <a href="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf" title="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf">13.5 percent</a>, whereas the y-o-y growth of GDP at current prices during the same period was <a href="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf" title="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf">26.7 percent</a>. It means that the GDP deflator grew y-o-y by 13.2 percent.&nbsp;</p><p style="text-align:justify">Likewise, the y-o-y growth of real Gross Value Added (GVA) at basic prices during Q1 of 2022-23 was <a href="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf" title="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf">12.7 percent</a>, whereas the y-o-y growth of GVA at basic prices at current prices during the same period was <a href="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf" title="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf">26.5 percent</a>. So, the GVA deflator grew y-o-y by 13.8 percent.&nbsp;</p><p style="text-align:justify">In order to arrive at GDP at constant prices from GDP at current prices, one needs a deflator. In the case of <a href="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html" title="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html">single deflation method</a>, a common price deflator is utilised to adjust both input and output prices. For <a href="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html" title="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html">double deflation method</a>, one needs two different deflators for adjusting input and output prices. In India, double deflation is done for agriculture, and mining and quarrying, whereas single deflation is used for other sectors. Thus, in <a href="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html" title="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html">our country, a mix</a> of single and double deflation methods is used. &nbsp;&nbsp;</p><p style="text-align:justify">A <a href="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html" title="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html">recent analysis</a> by Pragya Srivastava, published in Livemint.com, tells us that the GDP deflator on an average reflects 70 percent of the Wholesale Price Index (WPI) and 30 percent of the Consumer Price Index (CPI). As per HSBC Global Research, input prices <em>(reflected by WPI rise) </em>in the Q1 of 2022-23 have grown faster than the output prices <em>(indicated by the CPI increase)</em>, possibly leading to an underestimation of GVA growth, and therefore GDP growth. Remember, <a href="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf" title="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf">GDP at market prices</a> is derived as the <a href="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf" title="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf">sum of the GVA at basic prices</a>, <a href="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf" title="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf">plus all taxes on products</a>, <a href="https://pib.gov.in/PressReleasePage.aspx?PRID=1723153" title="https://pib.gov.in/PressReleasePage.aspx?PRID=1723153">less all subsidies on products</a>. In the case of single deflation method, if input <em>(indicated by WPI) </em>and output <em>(reflected by CPI)</em> prices expand at different rates, then it may cause overestimation or underestimation of economic performance.</p><p style="text-align:justify">A technical discussion by Jyoti Sharma <em>(please click <a href="https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html" title="https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html">here</a> and <a href="https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html" title="https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html">here</a> to access)</em> informs us that ideally, the GDP deflator of the MoSPI lies in the range {min. (CPI, WPI), max. (CPI, WPI)} i.e., the deflator must fall in the range defined by minimum of CPI and WPI and maximum of CPI and WPI for a sector. She proposes that in the case of double deflation method, CPI as a deflator for output value, and WPI for input value should be used. Instead of going for mix method, which India uses, one should go for either single or double deflation method across the sectors and sub-sectors in order to compare the trends across sectors.</p><p style="text-align:justify"><strong><em>References:&nbsp;</em></strong></p><p style="text-align:justify">Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2022-23, released on 31 August, 2022, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2022-23.pdf" title="/upload/files/PRESS_NOTE-Q1_2022-23.pdf">click here</a> to access&nbsp;</p><p style="text-align:justify">Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2021-22, released on 31 August, 2021, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2021-22.pdf" title="/upload/files/PRESS_NOTE-Q1_2021-22.pdf">click here</a> to access &nbsp;</p><p style="text-align:justify">Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2020-21, released on 31 August, 2020, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf" title="/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf">click here</a> to access&nbsp;</p><p style="text-align:justify">Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2019-20, released on 30 August, 2019, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2019-20.pdf" title="/upload/files/PRESS_NOTE-Q1_2019-20.pdf">click here</a> to access&nbsp;</p><p style="text-align:justify">Vahan registration website,&nbsp;Ministry of Road Transport and Highways,&nbsp;please <a href="https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml" title="https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml">click here</a> to access&nbsp;</p><p style="text-align:justify">Press Note on Provisional Estimates of Annual National Income 2021-22 and Quarterly Estimates of Gross Domestic Product for the Fourth Quarter (Q4) of 2021-22, released on 31 May 2022, MoSPI, please <a href="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf" title="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf">click here</a> to access &nbsp;</p><p style="text-align:justify">Press Note on First Advance Estimates of National Income 2020-21, released on 7 January, 2021, MoSPI, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf" title="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf">click here</a> to access &nbsp;</p><p style="text-align:justify">Press Note on First Advance Estimates of National Income 2019-20, released on 7 January, 2020, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf" title="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf">click here</a> to access &nbsp;</p><p style="text-align:justify">Press Note on First Advance Estimates of National Income 2018-19, released on 7 January, 2019, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf" title="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf">click here</a> to access &nbsp;</p><p style="text-align:justify">Press Note on First Advance Estimates of National Income 2017-18, released on 5 January, 2018, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf" title="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf">click here</a> to access &nbsp;</p><p style="text-align:justify">Press Note on Provisional Estimates of National Income 2016-17, released on 31 May, 2017, please <a href="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf" title="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf">click here</a> to access&nbsp;</p><p style="text-align:justify">Press release: Provisional estimates of Annual National Income, 2020-21 and Quarterly estimates (Q4) of Gross Domestic Product, 2020-21, Ministry of Statistics &amp; Programme Implementation, Press Information Bureau, released on 31 May, 2021, please click <a href="https://pib.gov.in/PressReleasePage.aspx?PRID=1723153" title="https://pib.gov.in/PressReleasePage.aspx?PRID=1723153">here</a> and <a href="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf" title="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf">here</a> to access &nbsp;&nbsp;</p><p style="text-align:justify">Estimates of Food Consumption Expenditure from Household Surveys and National Accounts -AC Kulshreshtha and Aloke Kar, Central Statistical Organisation (CSO), please <a href="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF" title="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">click here</a> to access&nbsp;</p><p style="text-align:justify">Is the GDP number an underestimate? -Pragya Srivastava, Livemint.com, 2 September, 2022, please <a href="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html" title="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html">click here</a> to access</p><p style="text-align:justify">The Real Story Behind India&rsquo;s Two Wheeler Sales or Rather the Lack of It -Vivek Kaul, 19 November, 2020, please <a href="https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/" title="https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/">click here</a> to access&nbsp;</p><p style="text-align:justify">Mind the statistics gap -C Rangarajan and S Mahendra Dev, The Indian Express, 13 December, 2019, please <a href="https://bit.ly/3Dsq9y2" title="https://bit.ly/3Dsq9y2">click here</a> to access&nbsp;</p><p style="text-align:justify">India&rsquo;s GDP: Deflating the right way -Jyoti Sharma, Ideas for India, 12 October, 2017, please <a href="https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html" title="https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html">click here</a> to access</p><p style="text-align:justify">India&rsquo;s GDP: Deflating the right way -Jyoti Sharma, Livemint.com, 12 October, 2017, please <a href="https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html" title="https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html">click here</a> to access</p><p style="text-align:justify">&nbsp;</p><p style="text-align:justify"><strong>Image Courtesy: Inclusive Media for Change/ Shambhu Ghatak</strong></p>               </font>
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		&#039;id&#039; =&gt; (int) 63693,
		&#039;title&#039; =&gt; &#039;Realistic analysis shows that the Indian economy has simply taken little steps in Q1 instead of a quantum leap&#039;,
		&#039;subheading&#039; =&gt; null,
		&#039;description&#039; =&gt; &#039;&lt;p style=&quot;text-align:justify&quot;&gt;There is euphoria abound about India&amp;#39;s growth performance during the first quarter of the current fiscal. As compared to the corresponding period last year, the year-on-year (y-o-y) GDP growth in the first quarter (Q1) of 2022-23 is down. However, one should take into account the fact that the high growth performance of the real GDP in Q1 of 2021-22 was due to the low base in the corresponding period of the first pandemic year. The optimism surrounding y-o-y&amp;nbsp;real GDP growth in the first quarter this year therefore appears to be natural.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;On further delving into the data, it can be discovered that after two years of the pandemic, the GDP in the Q1 of the current fiscal, crossed the GDP figure corresponding to the Q1 of 2019-20. Please see chart-1.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Chart%201%20Quarterly%20Estimates%20of%20Expenditure%20Components%20of%20GDP%20for%20Q1%20at%202011-12%20Prices%20in%20Rs.%20Crore%281%29.png&quot; style=&quot;height:687px; width:997px&quot; /&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source: **&lt;/strong&gt; Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2022-23, released on 31 August, 2022, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;*&lt;/strong&gt; Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2021-22, released on 31 August, 2021, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2021-22.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;##&lt;/strong&gt; Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2020-21, released on 31 August, 2020, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;# &lt;/strong&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2019-20, released on 30 August, 2019, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2019-20.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;
&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Growth in the real GDP is vital because it provides the government with additional revenue to spend. When the economy expands, it signifies that the economic activities are reaching the level as they existed during the normal times i.e., before the pandemic had struck. With the return of the economy to normalcy, employment generation is expected to take place. Employment creation can lead to a resurgence in effective demand i.e., purchasing power.&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Measuring real GDP growth after 2 years of the pandemic&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;The GDP at constant prices expanded by &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022.pdf&quot;&gt;4.1 percent in the last quarter (Q4)&lt;/a&gt; of 2021-22. While the real economy grew y-o-y by 13.51 percent in the Q1 as compared to a y-o-y real GDP growth of 20.08 percent in the corresponding period last year, a different picture emerges when the base is shifted to Q1 GDP in the pre-covid times. As compared to the 3-year average of the Q1 GDP pertaining to 2017-18, 2018-19, and 2019-20, the real GDP in the first quarter of the current fiscal expanded by 9.58 percent i.e., less than the y-o-y growth of 13.51 percent. Please take a&amp;nbsp;look at table-1.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Table 1: Quarterly Estimates of Expenditure Components of GDP for Q1 (April-June) at 2011-12 Prices, various years (in Rs. Crore)&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Table%201%20Quarterly%20Estimates%20of%20Expenditure%20Components%20of%20GDP%20for%20Q1%20at%202011-12%20Prices%20in%20Rs.%20Crore.png&quot; style=&quot;height:309px; width:874px&quot; /&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source: &lt;/strong&gt;Same as chart-1&lt;br /&gt;
&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;
&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;As compared to the 3-year average of the GDP during the first quarter of 2017-18, 2018-19 and 2019-20, the real GDP in the corresponding period last year contracted by 3.46 percent. As opposed to that, the y-o-y GDP expansion was to the tune of 20.08 percent in Q1 of 2021-22. Thus, the real GDP growth changes with the change in base and also the base year.&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;All the high frequency indicators aren&amp;rsquo;t moving in the same direction&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;After the completion of the first quarter of the current fiscal, the Ministry of Statistics and Programme Implementation (MoSPI) has provided the first estimate of the Q1&amp;rsquo;s GDP. On the basis of about &lt;a href=&quot;/upload/files/High%20frequency%20indicators.png&quot;&gt;20 high frequency indicators&lt;/a&gt;, the sector-wise estimates have been compiled by the ministry. Out of the 20 indicators, in the case of &amp;#39;total telephone subscribers&amp;#39; &lt;em&gt;(-2.5 percent)&lt;/em&gt;, &amp;#39;cargo handled at airports&amp;#39; &lt;em&gt;(-1.7 percent)&lt;/em&gt;, and &amp;#39;Index of Industrial Production (IIP) pertaining to metallic minerals&amp;#39; &lt;em&gt;(-6.5 percent)&lt;/em&gt;, there has been y-o-y contractions in Q1 of 2022-23 as opposed to positive growths in the corresponding period last year. &amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;In the case of certain high frequency indicators like &amp;#39;production of cement&amp;#39;, &amp;#39;consumption of steel&amp;#39;, &amp;#39;sales of commercial vehicles&amp;#39;, &amp;#39;purchase of private vehicles&amp;#39;, &amp;#39;cargo handled at major sea ports&amp;#39;, &amp;#39;passengers handled at airports&amp;#39;, &amp;#39;IIP pertaining to mining and manufacturing&amp;#39;, &amp;#39;net tonne kilometer - railways&amp;#39;, etc., the y-o-y percentage growth has reduced between Q1 of 2021-22 and Q1 of 2022-23.&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Two-wheeler sale to the average Indian citizen still down&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Some economists tend to use the data on two-wheeler sale, which is provided by the industry body &lt;a href=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot;&gt;Society of Indian Automobile Manufacturers (SIAM)&lt;/a&gt;. However, the SIAM data is related to the number of units which is &lt;a href=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot;&gt;sold by the manufacturers to dealers&lt;/a&gt; across the country. During economic slowdown, dealers may be unable to sell the products they purchase from manufacturers, which could lead to building up of inventory with the former. Hence, the SIAM data may not capture the real situation i.e., the number of two-wheelers bought by the final consumers.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Chart%202%20Two%20wheeler%20vehicles%20registered%20in%20Q1%20of%20various%20years.png&quot; style=&quot;height:555px; width:780px&quot; /&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source: &lt;/strong&gt;Vahan registration website,&amp;nbsp;Ministry of Road Transport and Highways,&amp;nbsp;please &lt;a href=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;br /&gt;
&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;
&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Instead of using SIAM data on two-wheeler sale, the data&amp;nbsp;that is provided by &lt;a href=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot;&gt;Vahan dashboard&lt;/a&gt; on vehicle registration, is used in the present piece. As compared to the 3-year average of the number of two-wheelers &lt;em&gt;(sum of non-transport and transport-two-wheelers) &lt;/em&gt;registered during April-June of 2017, 2018 and 2019, the number of two-wheeler vehicles registered in the first quarters of 2020, 2021 and 2022 has been lower. In short, if the number of two-wheelers registered is used for analysis, then it shows that the purchasing power of the average Indian consumer has still not reached the pre-pandemic level.&amp;nbsp;Please have a look at chart-2.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Whatever happened to consumer demand?&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;The Private Final Consumption Expenditure (PFCE) &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;represents the value of goods and services&lt;/a&gt; &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;consumed by the households&lt;/a&gt; and &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;the private non-profit institutions&lt;/a&gt; &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;serving households (NPISHs)&lt;/a&gt; in the period extending from the beginning of April of one calendar year to the end of March of the next. In 2021-22 &lt;em&gt;(provisional estimates)&lt;/em&gt;, PFCE&amp;nbsp;i.e., final consumer spending &lt;em&gt;(at 2011-12 prices) &lt;/em&gt;as a proportion of GDP &lt;em&gt;(at 2011-12 prices) &lt;/em&gt;was 56.85 percent. Therefore, the revival of consumer demand is essential for boosting economic growth. The y-o-y growth rates of PFCE &lt;em&gt;(at constant prices) &lt;/em&gt;were 8.88 percent in 2017-18, 6.61 percent in 2018-19, and 4.45 percent in 2019-20 &lt;em&gt;(2nd revised estimates)&lt;/em&gt;. However, the y-o-y growth rates of PFCE &lt;em&gt;(at constant price)&lt;/em&gt; dipped to -6.0 percent in 2020-21 &lt;em&gt;(1st RE)&lt;/em&gt; but bounced back to 7.91 percent in 2021-22 &lt;em&gt;(PE)&lt;/em&gt;. Please see table-2.&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Table 2: Provisional Estimates of National Income and Expenditure Components of GDP, various years (at 2011- 12 Prices)&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Table%202%20Provisional%20Estimates%20of%20National%20Income%20and%20Expenditure%20Components%20of%20GDP%20various%20years%20at%202011-12%20Prices.png&quot; style=&quot;height:523px; width:1050px&quot; /&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source:&lt;/strong&gt; &lt;strong&gt;**&lt;/strong&gt; Press Note on Provisional Estimates of Annual National Income 2021-22 and Quarterly Estimates of Gross Domestic Product for the Fourth Quarter (Q4) of 2021-22, released on 31 May 2022, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;#&lt;/strong&gt; Press Note on First Advance Estimates of National Income 2020-21, released on 7 January, 2021, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;## &lt;/strong&gt;Press Note on First Advance Estimates of National Income 2019-20, released on 7 January, 2020, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;#* &lt;/strong&gt;Press Note on First Advance Estimates of National Income 2018-19, released on 7 January, 2019, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;^* &lt;/strong&gt;Press Note on First Advance Estimates of National Income 2017-18, released on 5 January, 2018, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;^^ &lt;/strong&gt;Press Note on Provisional Estimates of National Income 2016-17, released on 31 May, 2017, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1aiEDfCYkTynV-ucq46fwJKffZosApMMk/edit?usp=sharing&amp;amp;ouid=112233925171588304692&amp;amp;rtpof=true&amp;amp;sd=true&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;
&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;As compared to the 3-year average of the PFCE &lt;em&gt;(at constant prices)&lt;/em&gt; pertaining to 2017-18, 2018-19, and 2019-20 &lt;em&gt;(2nd RE)&lt;/em&gt;, the real PFCE in 2020-21 &lt;em&gt;(1st RE)&lt;/em&gt; and 2021-22 &lt;em&gt;(PE)&lt;/em&gt; grew by -1.25 percent and 6.56 percent, respectively. The advance estimates of GDP &lt;em&gt;(at 2011-12 prices) &lt;/em&gt;for 2022-23 would be released in January next year. Till then, we will have to wait for commenting further about the sustained growth of consumer demand. &lt;a href=&quot;https://www.mse.ac.in/wp-content/uploads/2020/02/Ind-exp.-dec-13-Mind-the-statistics-gap.pdf&quot;&gt;Experts have suggested&lt;/a&gt; that in order to gauge consumer demand and income poverty, consumption expenditure survey of households by the National Statistical Office (NSO) needs to be done and the results are required to be published along with the release of&amp;nbsp;unit-level data. It is worth noting that the &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;gap between the National Accounts Statistics (NAS)&lt;/a&gt; &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;estimates of PFCE&lt;/a&gt; and the &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;National Sample Survey (NSS)&lt;/a&gt; &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;estimates of household consumption expenditure&lt;/a&gt;&amp;nbsp;&lt;em&gt;(aggregated at the national level)&lt;/em&gt; has grown progressively over the years.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;An alternative perspective&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;As said earlier, the y-o-y growth of GDP at constant prices during Q1 of 2022-23 was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;13.5 percent&lt;/a&gt;, whereas the y-o-y growth of GDP at current prices during the same period was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;26.7 percent&lt;/a&gt;. It means that the GDP deflator grew y-o-y by 13.2 percent.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Likewise, the y-o-y growth of real Gross Value Added (GVA) at basic prices during Q1 of 2022-23 was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;12.7 percent&lt;/a&gt;, whereas the y-o-y growth of GVA at basic prices at current prices during the same period was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;26.5 percent&lt;/a&gt;. So, the GVA deflator grew y-o-y by 13.8 percent.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;In order to arrive at GDP at constant prices from GDP at current prices, one needs a deflator. In the case of &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;single deflation method&lt;/a&gt;, a common price deflator is utilised to adjust both input and output prices. For &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;double deflation method&lt;/a&gt;, one needs two different deflators for adjusting input and output prices. In India, double deflation is done for agriculture, and mining and quarrying, whereas single deflation is used for other sectors. Thus, in &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;our country, a mix&lt;/a&gt; of single and double deflation methods is used. &amp;nbsp;&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;A &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;recent analysis&lt;/a&gt; by Pragya Srivastava, published in Livemint.com, tells us that the GDP deflator on an average reflects 70 percent of the Wholesale Price Index (WPI) and 30 percent of the Consumer Price Index (CPI). As per HSBC Global Research, input prices &lt;em&gt;(reflected by WPI rise) &lt;/em&gt;in the Q1 of 2022-23 have grown faster than the output prices &lt;em&gt;(indicated by the CPI increase)&lt;/em&gt;, possibly leading to an underestimation of GVA growth, and therefore GDP growth. Remember, &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;GDP at market prices&lt;/a&gt; is derived as the &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;sum of the GVA at basic prices&lt;/a&gt;, &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;plus all taxes on products&lt;/a&gt;, &lt;a href=&quot;https://pib.gov.in/PressReleasePage.aspx?PRID=1723153&quot;&gt;less all subsidies on products&lt;/a&gt;. In the case of single deflation method, if input &lt;em&gt;(indicated by WPI) &lt;/em&gt;and output &lt;em&gt;(reflected by CPI)&lt;/em&gt; prices expand at different rates, then it may cause overestimation or underestimation of economic performance.&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;A technical discussion by Jyoti Sharma &lt;em&gt;(please click &lt;a href=&quot;https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html&quot;&gt;here&lt;/a&gt; and &lt;a href=&quot;https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html&quot;&gt;here&lt;/a&gt; to access)&lt;/em&gt; informs us that ideally, the GDP deflator of the MoSPI lies in the range {min. (CPI, WPI), max. (CPI, WPI)} i.e., the deflator must fall in the range defined by minimum of CPI and WPI and maximum of CPI and WPI for a sector. She proposes that in the case of double deflation method, CPI as a deflator for output value, and WPI for input value should be used. Instead of going for mix method, which India uses, one should go for either single or double deflation method across the sectors and sub-sectors in order to compare the trends across sectors.&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;&lt;em&gt;References:&amp;nbsp;&lt;/em&gt;&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2022-23, released on 31 August, 2022, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2021-22, released on 31 August, 2021, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2021-22.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2020-21, released on 31 August, 2020, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2019-20, released on 30 August, 2019, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2019-20.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Vahan registration website,&amp;nbsp;Ministry of Road Transport and Highways,&amp;nbsp;please &lt;a href=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Provisional Estimates of Annual National Income 2021-22 and Quarterly Estimates of Gross Domestic Product for the Fourth Quarter (Q4) of 2021-22, released on 31 May 2022, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2020-21, released on 7 January, 2021, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2019-20, released on 7 January, 2020, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2018-19, released on 7 January, 2019, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2017-18, released on 5 January, 2018, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Provisional Estimates of National Income 2016-17, released on 31 May, 2017, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press release: Provisional estimates of Annual National Income, 2020-21 and Quarterly estimates (Q4) of Gross Domestic Product, 2020-21, Ministry of Statistics &amp;amp; Programme Implementation, Press Information Bureau, released on 31 May, 2021, please click &lt;a href=&quot;https://pib.gov.in/PressReleasePage.aspx?PRID=1723153&quot;&gt;here&lt;/a&gt; and &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;here&lt;/a&gt; to access &amp;nbsp;&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Estimates of Food Consumption Expenditure from Household Surveys and National Accounts -AC Kulshreshtha and Aloke Kar, Central Statistical Organisation (CSO), please &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Is the GDP number an underestimate? -Pragya Srivastava, Livemint.com, 2 September, 2022, please &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html &quot;&gt;click here&lt;/a&gt; to access&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;The Real Story Behind India&amp;rsquo;s Two Wheeler Sales or Rather the Lack of It -Vivek Kaul, 19 November, 2020, please &lt;a href=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Mind the statistics gap -C Rangarajan and S Mahendra Dev, The Indian Express, 13 December, 2019, please &lt;a href=&quot;https://bit.ly/3Dsq9y2&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;India&amp;rsquo;s GDP: Deflating the right way -Jyoti Sharma, Ideas for India, 12 October, 2017, please &lt;a href=&quot;https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html&quot;&gt;click here&lt;/a&gt; to access&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;India&amp;rsquo;s GDP: Deflating the right way -Jyoti Sharma, Livemint.com, 12 October, 2017, please &lt;a href=&quot;https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html &quot;&gt;click here&lt;/a&gt; to access&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Image Courtesy: Inclusive Media for Change/ Shambhu Ghatak&lt;/strong&gt;&lt;/p&gt;
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	&#039;metaTitle&#039; =&gt; &#039;NEWS ALERTS | Realistic analysis shows that the Indian economy has simply taken little steps in Q1 instead of a quantum leap&#039;,
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	&#039;metaDesc&#039; =&gt; &#039;There is euphoria abound about India&amp;#39;s growth performance during the first quarter of the current fiscal. As compared to the corresponding period last year, the year-on-year (y-o-y) GDP growth in the first quarter (Q1) of 2022-23 is down. However, one...&#039;,
	&#039;disp&#039; =&gt; &#039;&lt;p style=&quot;text-align:justify&quot;&gt;There is euphoria abound about India&amp;#39;s growth performance during the first quarter of the current fiscal. As compared to the corresponding period last year, the year-on-year (y-o-y) GDP growth in the first quarter (Q1) of 2022-23 is down. However, one should take into account the fact that the high growth performance of the real GDP in Q1 of 2021-22 was due to the low base in the corresponding period of the first pandemic year. The optimism surrounding y-o-y&amp;nbsp;real GDP growth in the first quarter this year therefore appears to be natural.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;On further delving into the data, it can be discovered that after two years of the pandemic, the GDP in the Q1 of the current fiscal, crossed the GDP figure corresponding to the Q1 of 2019-20. Please see chart-1.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Chart%201%20Quarterly%20Estimates%20of%20Expenditure%20Components%20of%20GDP%20for%20Q1%20at%202011-12%20Prices%20in%20Rs.%20Crore%281%29.png&quot; style=&quot;height:687px; width:997px&quot; /&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source: **&lt;/strong&gt; Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2022-23, released on 31 August, 2022, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;*&lt;/strong&gt; Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2021-22, released on 31 August, 2021, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2021-22.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2021-22.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;##&lt;/strong&gt; Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2020-21, released on 31 August, 2020, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;# &lt;/strong&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2019-20, released on 30 August, 2019, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2019-20.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2019-20.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot; title=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Growth in the real GDP is vital because it provides the government with additional revenue to spend. When the economy expands, it signifies that the economic activities are reaching the level as they existed during the normal times i.e., before the pandemic had struck. With the return of the economy to normalcy, employment generation is expected to take place. Employment creation can lead to a resurgence in effective demand i.e., purchasing power.&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Measuring real GDP growth after 2 years of the pandemic&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;The GDP at constant prices expanded by &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022.pdf&quot;&gt;4.1 percent in the last quarter (Q4)&lt;/a&gt; of 2021-22. While the real economy grew y-o-y by 13.51 percent in the Q1 as compared to a y-o-y real GDP growth of 20.08 percent in the corresponding period last year, a different picture emerges when the base is shifted to Q1 GDP in the pre-covid times. As compared to the 3-year average of the Q1 GDP pertaining to 2017-18, 2018-19, and 2019-20, the real GDP in the first quarter of the current fiscal expanded by 9.58 percent i.e., less than the y-o-y growth of 13.51 percent. Please take a&amp;nbsp;look at table-1.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Table 1: Quarterly Estimates of Expenditure Components of GDP for Q1 (April-June) at 2011-12 Prices, various years (in Rs. Crore)&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Table%201%20Quarterly%20Estimates%20of%20Expenditure%20Components%20of%20GDP%20for%20Q1%20at%202011-12%20Prices%20in%20Rs.%20Crore.png&quot; style=&quot;height:309px; width:874px&quot; /&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source: &lt;/strong&gt;Same as chart-1&lt;br /&gt;&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot; title=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;As compared to the 3-year average of the GDP during the first quarter of 2017-18, 2018-19 and 2019-20, the real GDP in the corresponding period last year contracted by 3.46 percent. As opposed to that, the y-o-y GDP expansion was to the tune of 20.08 percent in Q1 of 2021-22. Thus, the real GDP growth changes with the change in base and also the base year.&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;All the high frequency indicators aren&amp;rsquo;t moving in the same direction&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;After the completion of the first quarter of the current fiscal, the Ministry of Statistics and Programme Implementation (MoSPI) has provided the first estimate of the Q1&amp;rsquo;s GDP. On the basis of about &lt;a href=&quot;/upload/files/High%20frequency%20indicators.png&quot; title=&quot;/upload/files/High%20frequency%20indicators.png&quot;&gt;20 high frequency indicators&lt;/a&gt;, the sector-wise estimates have been compiled by the ministry. Out of the 20 indicators, in the case of &amp;#39;total telephone subscribers&amp;#39; &lt;em&gt;(-2.5 percent)&lt;/em&gt;, &amp;#39;cargo handled at airports&amp;#39; &lt;em&gt;(-1.7 percent)&lt;/em&gt;, and &amp;#39;Index of Industrial Production (IIP) pertaining to metallic minerals&amp;#39; &lt;em&gt;(-6.5 percent)&lt;/em&gt;, there has been y-o-y contractions in Q1 of 2022-23 as opposed to positive growths in the corresponding period last year. &amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;In the case of certain high frequency indicators like &amp;#39;production of cement&amp;#39;, &amp;#39;consumption of steel&amp;#39;, &amp;#39;sales of commercial vehicles&amp;#39;, &amp;#39;purchase of private vehicles&amp;#39;, &amp;#39;cargo handled at major sea ports&amp;#39;, &amp;#39;passengers handled at airports&amp;#39;, &amp;#39;IIP pertaining to mining and manufacturing&amp;#39;, &amp;#39;net tonne kilometer - railways&amp;#39;, etc., the y-o-y percentage growth has reduced between Q1 of 2021-22 and Q1 of 2022-23.&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Two-wheeler sale to the average Indian citizen still down&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Some economists tend to use the data on two-wheeler sale, which is provided by the industry body &lt;a href=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot; title=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot;&gt;Society of Indian Automobile Manufacturers (SIAM)&lt;/a&gt;. However, the SIAM data is related to the number of units which is &lt;a href=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot; title=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot;&gt;sold by the manufacturers to dealers&lt;/a&gt; across the country. During economic slowdown, dealers may be unable to sell the products they purchase from manufacturers, which could lead to building up of inventory with the former. Hence, the SIAM data may not capture the real situation i.e., the number of two-wheelers bought by the final consumers.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Chart%202%20Two%20wheeler%20vehicles%20registered%20in%20Q1%20of%20various%20years.png&quot; style=&quot;height:555px; width:780px&quot; /&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source: &lt;/strong&gt;Vahan registration website,&amp;nbsp;Ministry of Road Transport and Highways,&amp;nbsp;please &lt;a href=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot; title=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;br /&gt;&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot; title=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Instead of using SIAM data on two-wheeler sale, the data&amp;nbsp;that is provided by &lt;a href=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot; title=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot;&gt;Vahan dashboard&lt;/a&gt; on vehicle registration, is used in the present piece. As compared to the 3-year average of the number of two-wheelers &lt;em&gt;(sum of non-transport and transport-two-wheelers) &lt;/em&gt;registered during April-June of 2017, 2018 and 2019, the number of two-wheeler vehicles registered in the first quarters of 2020, 2021 and 2022 has been lower. In short, if the number of two-wheelers registered is used for analysis, then it shows that the purchasing power of the average Indian consumer has still not reached the pre-pandemic level.&amp;nbsp;Please have a look at chart-2.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Whatever happened to consumer demand?&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;The Private Final Consumption Expenditure (PFCE) &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;represents the value of goods and services&lt;/a&gt; &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;consumed by the households&lt;/a&gt; and &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;the private non-profit institutions&lt;/a&gt; &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;serving households (NPISHs)&lt;/a&gt; in the period extending from the beginning of April of one calendar year to the end of March of the next. In 2021-22 &lt;em&gt;(provisional estimates)&lt;/em&gt;, PFCE&amp;nbsp;i.e., final consumer spending &lt;em&gt;(at 2011-12 prices) &lt;/em&gt;as a proportion of GDP &lt;em&gt;(at 2011-12 prices) &lt;/em&gt;was 56.85 percent. Therefore, the revival of consumer demand is essential for boosting economic growth. The y-o-y growth rates of PFCE &lt;em&gt;(at constant prices) &lt;/em&gt;were 8.88 percent in 2017-18, 6.61 percent in 2018-19, and 4.45 percent in 2019-20 &lt;em&gt;(2nd revised estimates)&lt;/em&gt;. However, the y-o-y growth rates of PFCE &lt;em&gt;(at constant price)&lt;/em&gt; dipped to -6.0 percent in 2020-21 &lt;em&gt;(1st RE)&lt;/em&gt; but bounced back to 7.91 percent in 2021-22 &lt;em&gt;(PE)&lt;/em&gt;. Please see table-2.&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Table 2: Provisional Estimates of National Income and Expenditure Components of GDP, various years (at 2011- 12 Prices)&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Table%202%20Provisional%20Estimates%20of%20National%20Income%20and%20Expenditure%20Components%20of%20GDP%20various%20years%20at%202011-12%20Prices.png&quot; style=&quot;height:523px; width:1050px&quot; /&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source:&lt;/strong&gt; &lt;strong&gt;**&lt;/strong&gt; Press Note on Provisional Estimates of Annual National Income 2021-22 and Quarterly Estimates of Gross Domestic Product for the Fourth Quarter (Q4) of 2021-22, released on 31 May 2022, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;#&lt;/strong&gt; Press Note on First Advance Estimates of National Income 2020-21, released on 7 January, 2021, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;## &lt;/strong&gt;Press Note on First Advance Estimates of National Income 2019-20, released on 7 January, 2020, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;#* &lt;/strong&gt;Press Note on First Advance Estimates of National Income 2018-19, released on 7 January, 2019, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;^* &lt;/strong&gt;Press Note on First Advance Estimates of National Income 2017-18, released on 5 January, 2018, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;^^ &lt;/strong&gt;Press Note on Provisional Estimates of National Income 2016-17, released on 31 May, 2017, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1aiEDfCYkTynV-ucq46fwJKffZosApMMk/edit?usp=sharing&amp;amp;ouid=112233925171588304692&amp;amp;rtpof=true&amp;amp;sd=true&quot; title=&quot;https://docs.google.com/spreadsheets/d/1aiEDfCYkTynV-ucq46fwJKffZosApMMk/edit?usp=sharing&amp;amp;ouid=112233925171588304692&amp;amp;rtpof=true&amp;amp;sd=true&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;As compared to the 3-year average of the PFCE &lt;em&gt;(at constant prices)&lt;/em&gt; pertaining to 2017-18, 2018-19, and 2019-20 &lt;em&gt;(2nd RE)&lt;/em&gt;, the real PFCE in 2020-21 &lt;em&gt;(1st RE)&lt;/em&gt; and 2021-22 &lt;em&gt;(PE)&lt;/em&gt; grew by -1.25 percent and 6.56 percent, respectively. The advance estimates of GDP &lt;em&gt;(at 2011-12 prices) &lt;/em&gt;for 2022-23 would be released in January next year. Till then, we will have to wait for commenting further about the sustained growth of consumer demand. &lt;a href=&quot;https://www.mse.ac.in/wp-content/uploads/2020/02/Ind-exp.-dec-13-Mind-the-statistics-gap.pdf&quot; title=&quot;https://www.mse.ac.in/wp-content/uploads/2020/02/Ind-exp.-dec-13-Mind-the-statistics-gap.pdf&quot;&gt;Experts have suggested&lt;/a&gt; that in order to gauge consumer demand and income poverty, consumption expenditure survey of households by the National Statistical Office (NSO) needs to be done and the results are required to be published along with the release of&amp;nbsp;unit-level data. It is worth noting that the &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;gap between the National Accounts Statistics (NAS)&lt;/a&gt; &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;estimates of PFCE&lt;/a&gt; and the &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;National Sample Survey (NSS)&lt;/a&gt; &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;estimates of household consumption expenditure&lt;/a&gt;&amp;nbsp;&lt;em&gt;(aggregated at the national level)&lt;/em&gt; has grown progressively over the years.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;An alternative perspective&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;As said earlier, the y-o-y growth of GDP at constant prices during Q1 of 2022-23 was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot; title=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;13.5 percent&lt;/a&gt;, whereas the y-o-y growth of GDP at current prices during the same period was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot; title=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;26.7 percent&lt;/a&gt;. It means that the GDP deflator grew y-o-y by 13.2 percent.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Likewise, the y-o-y growth of real Gross Value Added (GVA) at basic prices during Q1 of 2022-23 was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot; title=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;12.7 percent&lt;/a&gt;, whereas the y-o-y growth of GVA at basic prices at current prices during the same period was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot; title=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;26.5 percent&lt;/a&gt;. So, the GVA deflator grew y-o-y by 13.8 percent.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;In order to arrive at GDP at constant prices from GDP at current prices, one needs a deflator. In the case of &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot; title=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;single deflation method&lt;/a&gt;, a common price deflator is utilised to adjust both input and output prices. For &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot; title=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;double deflation method&lt;/a&gt;, one needs two different deflators for adjusting input and output prices. In India, double deflation is done for agriculture, and mining and quarrying, whereas single deflation is used for other sectors. Thus, in &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot; title=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;our country, a mix&lt;/a&gt; of single and double deflation methods is used. &amp;nbsp;&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;A &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot; title=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;recent analysis&lt;/a&gt; by Pragya Srivastava, published in Livemint.com, tells us that the GDP deflator on an average reflects 70 percent of the Wholesale Price Index (WPI) and 30 percent of the Consumer Price Index (CPI). As per HSBC Global Research, input prices &lt;em&gt;(reflected by WPI rise) &lt;/em&gt;in the Q1 of 2022-23 have grown faster than the output prices &lt;em&gt;(indicated by the CPI increase)&lt;/em&gt;, possibly leading to an underestimation of GVA growth, and therefore GDP growth. Remember, &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot; title=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;GDP at market prices&lt;/a&gt; is derived as the &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot; title=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;sum of the GVA at basic prices&lt;/a&gt;, &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot; title=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;plus all taxes on products&lt;/a&gt;, &lt;a href=&quot;https://pib.gov.in/PressReleasePage.aspx?PRID=1723153&quot; title=&quot;https://pib.gov.in/PressReleasePage.aspx?PRID=1723153&quot;&gt;less all subsidies on products&lt;/a&gt;. In the case of single deflation method, if input &lt;em&gt;(indicated by WPI) &lt;/em&gt;and output &lt;em&gt;(reflected by CPI)&lt;/em&gt; prices expand at different rates, then it may cause overestimation or underestimation of economic performance.&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;A technical discussion by Jyoti Sharma &lt;em&gt;(please click &lt;a href=&quot;https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html&quot; title=&quot;https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html&quot;&gt;here&lt;/a&gt; and &lt;a href=&quot;https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html&quot; title=&quot;https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html&quot;&gt;here&lt;/a&gt; to access)&lt;/em&gt; informs us that ideally, the GDP deflator of the MoSPI lies in the range {min. (CPI, WPI), max. (CPI, WPI)} i.e., the deflator must fall in the range defined by minimum of CPI and WPI and maximum of CPI and WPI for a sector. She proposes that in the case of double deflation method, CPI as a deflator for output value, and WPI for input value should be used. Instead of going for mix method, which India uses, one should go for either single or double deflation method across the sectors and sub-sectors in order to compare the trends across sectors.&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;&lt;em&gt;References:&amp;nbsp;&lt;/em&gt;&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2022-23, released on 31 August, 2022, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2021-22, released on 31 August, 2021, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2021-22.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2021-22.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2020-21, released on 31 August, 2020, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2019-20, released on 30 August, 2019, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2019-20.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2019-20.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Vahan registration website,&amp;nbsp;Ministry of Road Transport and Highways,&amp;nbsp;please &lt;a href=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot; title=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Provisional Estimates of Annual National Income 2021-22 and Quarterly Estimates of Gross Domestic Product for the Fourth Quarter (Q4) of 2021-22, released on 31 May 2022, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2020-21, released on 7 January, 2021, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2019-20, released on 7 January, 2020, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2018-19, released on 7 January, 2019, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2017-18, released on 5 January, 2018, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Provisional Estimates of National Income 2016-17, released on 31 May, 2017, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press release: Provisional estimates of Annual National Income, 2020-21 and Quarterly estimates (Q4) of Gross Domestic Product, 2020-21, Ministry of Statistics &amp;amp; Programme Implementation, Press Information Bureau, released on 31 May, 2021, please click &lt;a href=&quot;https://pib.gov.in/PressReleasePage.aspx?PRID=1723153&quot; title=&quot;https://pib.gov.in/PressReleasePage.aspx?PRID=1723153&quot;&gt;here&lt;/a&gt; and &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot; title=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;here&lt;/a&gt; to access &amp;nbsp;&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Estimates of Food Consumption Expenditure from Household Surveys and National Accounts -AC Kulshreshtha and Aloke Kar, Central Statistical Organisation (CSO), please &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Is the GDP number an underestimate? -Pragya Srivastava, Livemint.com, 2 September, 2022, please &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot; title=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;click here&lt;/a&gt; to access&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;The Real Story Behind India&amp;rsquo;s Two Wheeler Sales or Rather the Lack of It -Vivek Kaul, 19 November, 2020, please &lt;a href=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot; title=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Mind the statistics gap -C Rangarajan and S Mahendra Dev, The Indian Express, 13 December, 2019, please &lt;a href=&quot;https://bit.ly/3Dsq9y2&quot; title=&quot;https://bit.ly/3Dsq9y2&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;India&amp;rsquo;s GDP: Deflating the right way -Jyoti Sharma, Ideas for India, 12 October, 2017, please &lt;a href=&quot;https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html&quot; title=&quot;https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html&quot;&gt;click here&lt;/a&gt; to access&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;India&amp;rsquo;s GDP: Deflating the right way -Jyoti Sharma, Livemint.com, 12 October, 2017, please &lt;a href=&quot;https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html&quot; title=&quot;https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html&quot;&gt;click here&lt;/a&gt; to access&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Image Courtesy: Inclusive Media for Change/ Shambhu Ghatak&lt;/strong&gt;&lt;/p&gt;&#039;,
	&#039;lang&#039; =&gt; &#039;English&#039;,
	&#039;SITE_URL&#039; =&gt; &#039;https://im4change.in/&#039;,
	&#039;site_title&#039; =&gt; &#039;im4change&#039;,
	&#039;adminprix&#039; =&gt; &#039;admin&#039;
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$article_current = object(App\Model\Entity\Article) {

	&#039;id&#039; =&gt; (int) 63693,
	&#039;title&#039; =&gt; &#039;Realistic analysis shows that the Indian economy has simply taken little steps in Q1 instead of a quantum leap&#039;,
	&#039;subheading&#039; =&gt; null,
	&#039;description&#039; =&gt; &#039;&lt;p style=&quot;text-align:justify&quot;&gt;There is euphoria abound about India&amp;#39;s growth performance during the first quarter of the current fiscal. As compared to the corresponding period last year, the year-on-year (y-o-y) GDP growth in the first quarter (Q1) of 2022-23 is down. However, one should take into account the fact that the high growth performance of the real GDP in Q1 of 2021-22 was due to the low base in the corresponding period of the first pandemic year. The optimism surrounding y-o-y&amp;nbsp;real GDP growth in the first quarter this year therefore appears to be natural.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;On further delving into the data, it can be discovered that after two years of the pandemic, the GDP in the Q1 of the current fiscal, crossed the GDP figure corresponding to the Q1 of 2019-20. Please see chart-1.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Chart%201%20Quarterly%20Estimates%20of%20Expenditure%20Components%20of%20GDP%20for%20Q1%20at%202011-12%20Prices%20in%20Rs.%20Crore%281%29.png&quot; style=&quot;height:687px; width:997px&quot; /&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source: **&lt;/strong&gt; Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2022-23, released on 31 August, 2022, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;*&lt;/strong&gt; Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2021-22, released on 31 August, 2021, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2021-22.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;##&lt;/strong&gt; Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2020-21, released on 31 August, 2020, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;# &lt;/strong&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2019-20, released on 30 August, 2019, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2019-20.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;
&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Growth in the real GDP is vital because it provides the government with additional revenue to spend. When the economy expands, it signifies that the economic activities are reaching the level as they existed during the normal times i.e., before the pandemic had struck. With the return of the economy to normalcy, employment generation is expected to take place. Employment creation can lead to a resurgence in effective demand i.e., purchasing power.&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Measuring real GDP growth after 2 years of the pandemic&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;The GDP at constant prices expanded by &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022.pdf&quot;&gt;4.1 percent in the last quarter (Q4)&lt;/a&gt; of 2021-22. While the real economy grew y-o-y by 13.51 percent in the Q1 as compared to a y-o-y real GDP growth of 20.08 percent in the corresponding period last year, a different picture emerges when the base is shifted to Q1 GDP in the pre-covid times. As compared to the 3-year average of the Q1 GDP pertaining to 2017-18, 2018-19, and 2019-20, the real GDP in the first quarter of the current fiscal expanded by 9.58 percent i.e., less than the y-o-y growth of 13.51 percent. Please take a&amp;nbsp;look at table-1.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Table 1: Quarterly Estimates of Expenditure Components of GDP for Q1 (April-June) at 2011-12 Prices, various years (in Rs. Crore)&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Table%201%20Quarterly%20Estimates%20of%20Expenditure%20Components%20of%20GDP%20for%20Q1%20at%202011-12%20Prices%20in%20Rs.%20Crore.png&quot; style=&quot;height:309px; width:874px&quot; /&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source: &lt;/strong&gt;Same as chart-1&lt;br /&gt;
&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;
&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;As compared to the 3-year average of the GDP during the first quarter of 2017-18, 2018-19 and 2019-20, the real GDP in the corresponding period last year contracted by 3.46 percent. As opposed to that, the y-o-y GDP expansion was to the tune of 20.08 percent in Q1 of 2021-22. Thus, the real GDP growth changes with the change in base and also the base year.&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;All the high frequency indicators aren&amp;rsquo;t moving in the same direction&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;After the completion of the first quarter of the current fiscal, the Ministry of Statistics and Programme Implementation (MoSPI) has provided the first estimate of the Q1&amp;rsquo;s GDP. On the basis of about &lt;a href=&quot;/upload/files/High%20frequency%20indicators.png&quot;&gt;20 high frequency indicators&lt;/a&gt;, the sector-wise estimates have been compiled by the ministry. Out of the 20 indicators, in the case of &amp;#39;total telephone subscribers&amp;#39; &lt;em&gt;(-2.5 percent)&lt;/em&gt;, &amp;#39;cargo handled at airports&amp;#39; &lt;em&gt;(-1.7 percent)&lt;/em&gt;, and &amp;#39;Index of Industrial Production (IIP) pertaining to metallic minerals&amp;#39; &lt;em&gt;(-6.5 percent)&lt;/em&gt;, there has been y-o-y contractions in Q1 of 2022-23 as opposed to positive growths in the corresponding period last year. &amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;In the case of certain high frequency indicators like &amp;#39;production of cement&amp;#39;, &amp;#39;consumption of steel&amp;#39;, &amp;#39;sales of commercial vehicles&amp;#39;, &amp;#39;purchase of private vehicles&amp;#39;, &amp;#39;cargo handled at major sea ports&amp;#39;, &amp;#39;passengers handled at airports&amp;#39;, &amp;#39;IIP pertaining to mining and manufacturing&amp;#39;, &amp;#39;net tonne kilometer - railways&amp;#39;, etc., the y-o-y percentage growth has reduced between Q1 of 2021-22 and Q1 of 2022-23.&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Two-wheeler sale to the average Indian citizen still down&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Some economists tend to use the data on two-wheeler sale, which is provided by the industry body &lt;a href=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot;&gt;Society of Indian Automobile Manufacturers (SIAM)&lt;/a&gt;. However, the SIAM data is related to the number of units which is &lt;a href=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot;&gt;sold by the manufacturers to dealers&lt;/a&gt; across the country. During economic slowdown, dealers may be unable to sell the products they purchase from manufacturers, which could lead to building up of inventory with the former. Hence, the SIAM data may not capture the real situation i.e., the number of two-wheelers bought by the final consumers.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Chart%202%20Two%20wheeler%20vehicles%20registered%20in%20Q1%20of%20various%20years.png&quot; style=&quot;height:555px; width:780px&quot; /&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source: &lt;/strong&gt;Vahan registration website,&amp;nbsp;Ministry of Road Transport and Highways,&amp;nbsp;please &lt;a href=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;br /&gt;
&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;
&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Instead of using SIAM data on two-wheeler sale, the data&amp;nbsp;that is provided by &lt;a href=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot;&gt;Vahan dashboard&lt;/a&gt; on vehicle registration, is used in the present piece. As compared to the 3-year average of the number of two-wheelers &lt;em&gt;(sum of non-transport and transport-two-wheelers) &lt;/em&gt;registered during April-June of 2017, 2018 and 2019, the number of two-wheeler vehicles registered in the first quarters of 2020, 2021 and 2022 has been lower. In short, if the number of two-wheelers registered is used for analysis, then it shows that the purchasing power of the average Indian consumer has still not reached the pre-pandemic level.&amp;nbsp;Please have a look at chart-2.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Whatever happened to consumer demand?&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;The Private Final Consumption Expenditure (PFCE) &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;represents the value of goods and services&lt;/a&gt; &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;consumed by the households&lt;/a&gt; and &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;the private non-profit institutions&lt;/a&gt; &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;serving households (NPISHs)&lt;/a&gt; in the period extending from the beginning of April of one calendar year to the end of March of the next. In 2021-22 &lt;em&gt;(provisional estimates)&lt;/em&gt;, PFCE&amp;nbsp;i.e., final consumer spending &lt;em&gt;(at 2011-12 prices) &lt;/em&gt;as a proportion of GDP &lt;em&gt;(at 2011-12 prices) &lt;/em&gt;was 56.85 percent. Therefore, the revival of consumer demand is essential for boosting economic growth. The y-o-y growth rates of PFCE &lt;em&gt;(at constant prices) &lt;/em&gt;were 8.88 percent in 2017-18, 6.61 percent in 2018-19, and 4.45 percent in 2019-20 &lt;em&gt;(2nd revised estimates)&lt;/em&gt;. However, the y-o-y growth rates of PFCE &lt;em&gt;(at constant price)&lt;/em&gt; dipped to -6.0 percent in 2020-21 &lt;em&gt;(1st RE)&lt;/em&gt; but bounced back to 7.91 percent in 2021-22 &lt;em&gt;(PE)&lt;/em&gt;. Please see table-2.&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Table 2: Provisional Estimates of National Income and Expenditure Components of GDP, various years (at 2011- 12 Prices)&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Table%202%20Provisional%20Estimates%20of%20National%20Income%20and%20Expenditure%20Components%20of%20GDP%20various%20years%20at%202011-12%20Prices.png&quot; style=&quot;height:523px; width:1050px&quot; /&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source:&lt;/strong&gt; &lt;strong&gt;**&lt;/strong&gt; Press Note on Provisional Estimates of Annual National Income 2021-22 and Quarterly Estimates of Gross Domestic Product for the Fourth Quarter (Q4) of 2021-22, released on 31 May 2022, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;#&lt;/strong&gt; Press Note on First Advance Estimates of National Income 2020-21, released on 7 January, 2021, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;## &lt;/strong&gt;Press Note on First Advance Estimates of National Income 2019-20, released on 7 January, 2020, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;#* &lt;/strong&gt;Press Note on First Advance Estimates of National Income 2018-19, released on 7 January, 2019, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;^* &lt;/strong&gt;Press Note on First Advance Estimates of National Income 2017-18, released on 5 January, 2018, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;^^ &lt;/strong&gt;Press Note on Provisional Estimates of National Income 2016-17, released on 31 May, 2017, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1aiEDfCYkTynV-ucq46fwJKffZosApMMk/edit?usp=sharing&amp;amp;ouid=112233925171588304692&amp;amp;rtpof=true&amp;amp;sd=true&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;
&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;As compared to the 3-year average of the PFCE &lt;em&gt;(at constant prices)&lt;/em&gt; pertaining to 2017-18, 2018-19, and 2019-20 &lt;em&gt;(2nd RE)&lt;/em&gt;, the real PFCE in 2020-21 &lt;em&gt;(1st RE)&lt;/em&gt; and 2021-22 &lt;em&gt;(PE)&lt;/em&gt; grew by -1.25 percent and 6.56 percent, respectively. The advance estimates of GDP &lt;em&gt;(at 2011-12 prices) &lt;/em&gt;for 2022-23 would be released in January next year. Till then, we will have to wait for commenting further about the sustained growth of consumer demand. &lt;a href=&quot;https://www.mse.ac.in/wp-content/uploads/2020/02/Ind-exp.-dec-13-Mind-the-statistics-gap.pdf&quot;&gt;Experts have suggested&lt;/a&gt; that in order to gauge consumer demand and income poverty, consumption expenditure survey of households by the National Statistical Office (NSO) needs to be done and the results are required to be published along with the release of&amp;nbsp;unit-level data. It is worth noting that the &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;gap between the National Accounts Statistics (NAS)&lt;/a&gt; &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;estimates of PFCE&lt;/a&gt; and the &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;National Sample Survey (NSS)&lt;/a&gt; &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;estimates of household consumption expenditure&lt;/a&gt;&amp;nbsp;&lt;em&gt;(aggregated at the national level)&lt;/em&gt; has grown progressively over the years.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;An alternative perspective&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;As said earlier, the y-o-y growth of GDP at constant prices during Q1 of 2022-23 was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;13.5 percent&lt;/a&gt;, whereas the y-o-y growth of GDP at current prices during the same period was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;26.7 percent&lt;/a&gt;. It means that the GDP deflator grew y-o-y by 13.2 percent.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Likewise, the y-o-y growth of real Gross Value Added (GVA) at basic prices during Q1 of 2022-23 was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;12.7 percent&lt;/a&gt;, whereas the y-o-y growth of GVA at basic prices at current prices during the same period was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;26.5 percent&lt;/a&gt;. So, the GVA deflator grew y-o-y by 13.8 percent.&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;In order to arrive at GDP at constant prices from GDP at current prices, one needs a deflator. In the case of &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;single deflation method&lt;/a&gt;, a common price deflator is utilised to adjust both input and output prices. For &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;double deflation method&lt;/a&gt;, one needs two different deflators for adjusting input and output prices. In India, double deflation is done for agriculture, and mining and quarrying, whereas single deflation is used for other sectors. Thus, in &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;our country, a mix&lt;/a&gt; of single and double deflation methods is used. &amp;nbsp;&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;A &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;recent analysis&lt;/a&gt; by Pragya Srivastava, published in Livemint.com, tells us that the GDP deflator on an average reflects 70 percent of the Wholesale Price Index (WPI) and 30 percent of the Consumer Price Index (CPI). As per HSBC Global Research, input prices &lt;em&gt;(reflected by WPI rise) &lt;/em&gt;in the Q1 of 2022-23 have grown faster than the output prices &lt;em&gt;(indicated by the CPI increase)&lt;/em&gt;, possibly leading to an underestimation of GVA growth, and therefore GDP growth. Remember, &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;GDP at market prices&lt;/a&gt; is derived as the &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;sum of the GVA at basic prices&lt;/a&gt;, &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;plus all taxes on products&lt;/a&gt;, &lt;a href=&quot;https://pib.gov.in/PressReleasePage.aspx?PRID=1723153&quot;&gt;less all subsidies on products&lt;/a&gt;. In the case of single deflation method, if input &lt;em&gt;(indicated by WPI) &lt;/em&gt;and output &lt;em&gt;(reflected by CPI)&lt;/em&gt; prices expand at different rates, then it may cause overestimation or underestimation of economic performance.&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;A technical discussion by Jyoti Sharma &lt;em&gt;(please click &lt;a href=&quot;https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html&quot;&gt;here&lt;/a&gt; and &lt;a href=&quot;https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html&quot;&gt;here&lt;/a&gt; to access)&lt;/em&gt; informs us that ideally, the GDP deflator of the MoSPI lies in the range {min. (CPI, WPI), max. (CPI, WPI)} i.e., the deflator must fall in the range defined by minimum of CPI and WPI and maximum of CPI and WPI for a sector. She proposes that in the case of double deflation method, CPI as a deflator for output value, and WPI for input value should be used. Instead of going for mix method, which India uses, one should go for either single or double deflation method across the sectors and sub-sectors in order to compare the trends across sectors.&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;&lt;em&gt;References:&amp;nbsp;&lt;/em&gt;&lt;/strong&gt;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2022-23, released on 31 August, 2022, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2021-22, released on 31 August, 2021, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2021-22.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2020-21, released on 31 August, 2020, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2019-20, released on 30 August, 2019, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2019-20.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Vahan registration website,&amp;nbsp;Ministry of Road Transport and Highways,&amp;nbsp;please &lt;a href=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Provisional Estimates of Annual National Income 2021-22 and Quarterly Estimates of Gross Domestic Product for the Fourth Quarter (Q4) of 2021-22, released on 31 May 2022, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2020-21, released on 7 January, 2021, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2019-20, released on 7 January, 2020, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2018-19, released on 7 January, 2019, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2017-18, released on 5 January, 2018, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Provisional Estimates of National Income 2016-17, released on 31 May, 2017, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Press release: Provisional estimates of Annual National Income, 2020-21 and Quarterly estimates (Q4) of Gross Domestic Product, 2020-21, Ministry of Statistics &amp;amp; Programme Implementation, Press Information Bureau, released on 31 May, 2021, please click &lt;a href=&quot;https://pib.gov.in/PressReleasePage.aspx?PRID=1723153&quot;&gt;here&lt;/a&gt; and &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;here&lt;/a&gt; to access &amp;nbsp;&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Estimates of Food Consumption Expenditure from Household Surveys and National Accounts -AC Kulshreshtha and Aloke Kar, Central Statistical Organisation (CSO), please &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Is the GDP number an underestimate? -Pragya Srivastava, Livemint.com, 2 September, 2022, please &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html &quot;&gt;click here&lt;/a&gt; to access&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;The Real Story Behind India&amp;rsquo;s Two Wheeler Sales or Rather the Lack of It -Vivek Kaul, 19 November, 2020, please &lt;a href=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;Mind the statistics gap -C Rangarajan and S Mahendra Dev, The Indian Express, 13 December, 2019, please &lt;a href=&quot;https://bit.ly/3Dsq9y2&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;India&amp;rsquo;s GDP: Deflating the right way -Jyoti Sharma, Ideas for India, 12 October, 2017, please &lt;a href=&quot;https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html&quot;&gt;click here&lt;/a&gt; to access&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;India&amp;rsquo;s GDP: Deflating the right way -Jyoti Sharma, Livemint.com, 12 October, 2017, please &lt;a href=&quot;https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html &quot;&gt;click here&lt;/a&gt; to access&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&amp;nbsp;&lt;/p&gt;

&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Image Courtesy: Inclusive Media for Change/ Shambhu Ghatak&lt;/strong&gt;&lt;/p&gt;
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$metaTitle = &#039;NEWS ALERTS | Realistic analysis shows that the Indian economy has simply taken little steps in Q1 instead of a quantum leap&#039;
$metaKeywords = &#039;Consumer Price Index,CPI,GDP at 2011-12 prices,GDP at constant prices,GDP at current prices,GDP deflation,Gross Value Added,GVA at basic prices,Real GDP growth,Wholesale Price Index,WPI&#039;
$metaDesc = &#039;There is euphoria abound about India&amp;#39;s growth performance during the first quarter of the current fiscal. As compared to the corresponding period last year, the year-on-year (y-o-y) GDP growth in the first quarter (Q1) of 2022-23 is down. However, one...&#039;
$disp = &#039;&lt;p style=&quot;text-align:justify&quot;&gt;There is euphoria abound about India&amp;#39;s growth performance during the first quarter of the current fiscal. As compared to the corresponding period last year, the year-on-year (y-o-y) GDP growth in the first quarter (Q1) of 2022-23 is down. However, one should take into account the fact that the high growth performance of the real GDP in Q1 of 2021-22 was due to the low base in the corresponding period of the first pandemic year. The optimism surrounding y-o-y&amp;nbsp;real GDP growth in the first quarter this year therefore appears to be natural.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;On further delving into the data, it can be discovered that after two years of the pandemic, the GDP in the Q1 of the current fiscal, crossed the GDP figure corresponding to the Q1 of 2019-20. Please see chart-1.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Chart%201%20Quarterly%20Estimates%20of%20Expenditure%20Components%20of%20GDP%20for%20Q1%20at%202011-12%20Prices%20in%20Rs.%20Crore%281%29.png&quot; style=&quot;height:687px; width:997px&quot; /&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source: **&lt;/strong&gt; Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2022-23, released on 31 August, 2022, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;*&lt;/strong&gt; Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2021-22, released on 31 August, 2021, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2021-22.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2021-22.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;##&lt;/strong&gt; Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2020-21, released on 31 August, 2020, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;# &lt;/strong&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2019-20, released on 30 August, 2019, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2019-20.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2019-20.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot; title=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Growth in the real GDP is vital because it provides the government with additional revenue to spend. When the economy expands, it signifies that the economic activities are reaching the level as they existed during the normal times i.e., before the pandemic had struck. With the return of the economy to normalcy, employment generation is expected to take place. Employment creation can lead to a resurgence in effective demand i.e., purchasing power.&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Measuring real GDP growth after 2 years of the pandemic&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;The GDP at constant prices expanded by &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022.pdf&quot;&gt;4.1 percent in the last quarter (Q4)&lt;/a&gt; of 2021-22. While the real economy grew y-o-y by 13.51 percent in the Q1 as compared to a y-o-y real GDP growth of 20.08 percent in the corresponding period last year, a different picture emerges when the base is shifted to Q1 GDP in the pre-covid times. As compared to the 3-year average of the Q1 GDP pertaining to 2017-18, 2018-19, and 2019-20, the real GDP in the first quarter of the current fiscal expanded by 9.58 percent i.e., less than the y-o-y growth of 13.51 percent. Please take a&amp;nbsp;look at table-1.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Table 1: Quarterly Estimates of Expenditure Components of GDP for Q1 (April-June) at 2011-12 Prices, various years (in Rs. Crore)&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Table%201%20Quarterly%20Estimates%20of%20Expenditure%20Components%20of%20GDP%20for%20Q1%20at%202011-12%20Prices%20in%20Rs.%20Crore.png&quot; style=&quot;height:309px; width:874px&quot; /&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source: &lt;/strong&gt;Same as chart-1&lt;br /&gt;&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot; title=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;As compared to the 3-year average of the GDP during the first quarter of 2017-18, 2018-19 and 2019-20, the real GDP in the corresponding period last year contracted by 3.46 percent. As opposed to that, the y-o-y GDP expansion was to the tune of 20.08 percent in Q1 of 2021-22. Thus, the real GDP growth changes with the change in base and also the base year.&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;All the high frequency indicators aren&amp;rsquo;t moving in the same direction&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;After the completion of the first quarter of the current fiscal, the Ministry of Statistics and Programme Implementation (MoSPI) has provided the first estimate of the Q1&amp;rsquo;s GDP. On the basis of about &lt;a href=&quot;/upload/files/High%20frequency%20indicators.png&quot; title=&quot;/upload/files/High%20frequency%20indicators.png&quot;&gt;20 high frequency indicators&lt;/a&gt;, the sector-wise estimates have been compiled by the ministry. Out of the 20 indicators, in the case of &amp;#39;total telephone subscribers&amp;#39; &lt;em&gt;(-2.5 percent)&lt;/em&gt;, &amp;#39;cargo handled at airports&amp;#39; &lt;em&gt;(-1.7 percent)&lt;/em&gt;, and &amp;#39;Index of Industrial Production (IIP) pertaining to metallic minerals&amp;#39; &lt;em&gt;(-6.5 percent)&lt;/em&gt;, there has been y-o-y contractions in Q1 of 2022-23 as opposed to positive growths in the corresponding period last year. &amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;In the case of certain high frequency indicators like &amp;#39;production of cement&amp;#39;, &amp;#39;consumption of steel&amp;#39;, &amp;#39;sales of commercial vehicles&amp;#39;, &amp;#39;purchase of private vehicles&amp;#39;, &amp;#39;cargo handled at major sea ports&amp;#39;, &amp;#39;passengers handled at airports&amp;#39;, &amp;#39;IIP pertaining to mining and manufacturing&amp;#39;, &amp;#39;net tonne kilometer - railways&amp;#39;, etc., the y-o-y percentage growth has reduced between Q1 of 2021-22 and Q1 of 2022-23.&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Two-wheeler sale to the average Indian citizen still down&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Some economists tend to use the data on two-wheeler sale, which is provided by the industry body &lt;a href=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot; title=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot;&gt;Society of Indian Automobile Manufacturers (SIAM)&lt;/a&gt;. However, the SIAM data is related to the number of units which is &lt;a href=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot; title=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot;&gt;sold by the manufacturers to dealers&lt;/a&gt; across the country. During economic slowdown, dealers may be unable to sell the products they purchase from manufacturers, which could lead to building up of inventory with the former. Hence, the SIAM data may not capture the real situation i.e., the number of two-wheelers bought by the final consumers.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Chart%202%20Two%20wheeler%20vehicles%20registered%20in%20Q1%20of%20various%20years.png&quot; style=&quot;height:555px; width:780px&quot; /&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source: &lt;/strong&gt;Vahan registration website,&amp;nbsp;Ministry of Road Transport and Highways,&amp;nbsp;please &lt;a href=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot; title=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;br /&gt;&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot; title=&quot;https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Instead of using SIAM data on two-wheeler sale, the data&amp;nbsp;that is provided by &lt;a href=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot; title=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot;&gt;Vahan dashboard&lt;/a&gt; on vehicle registration, is used in the present piece. As compared to the 3-year average of the number of two-wheelers &lt;em&gt;(sum of non-transport and transport-two-wheelers) &lt;/em&gt;registered during April-June of 2017, 2018 and 2019, the number of two-wheeler vehicles registered in the first quarters of 2020, 2021 and 2022 has been lower. In short, if the number of two-wheelers registered is used for analysis, then it shows that the purchasing power of the average Indian consumer has still not reached the pre-pandemic level.&amp;nbsp;Please have a look at chart-2.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Whatever happened to consumer demand?&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;The Private Final Consumption Expenditure (PFCE) &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;represents the value of goods and services&lt;/a&gt; &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;consumed by the households&lt;/a&gt; and &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;the private non-profit institutions&lt;/a&gt; &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;serving households (NPISHs)&lt;/a&gt; in the period extending from the beginning of April of one calendar year to the end of March of the next. In 2021-22 &lt;em&gt;(provisional estimates)&lt;/em&gt;, PFCE&amp;nbsp;i.e., final consumer spending &lt;em&gt;(at 2011-12 prices) &lt;/em&gt;as a proportion of GDP &lt;em&gt;(at 2011-12 prices) &lt;/em&gt;was 56.85 percent. Therefore, the revival of consumer demand is essential for boosting economic growth. The y-o-y growth rates of PFCE &lt;em&gt;(at constant prices) &lt;/em&gt;were 8.88 percent in 2017-18, 6.61 percent in 2018-19, and 4.45 percent in 2019-20 &lt;em&gt;(2nd revised estimates)&lt;/em&gt;. However, the y-o-y growth rates of PFCE &lt;em&gt;(at constant price)&lt;/em&gt; dipped to -6.0 percent in 2020-21 &lt;em&gt;(1st RE)&lt;/em&gt; but bounced back to 7.91 percent in 2021-22 &lt;em&gt;(PE)&lt;/em&gt;. Please see table-2.&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Table 2: Provisional Estimates of National Income and Expenditure Components of GDP, various years (at 2011- 12 Prices)&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;img alt=&quot;&quot; src=&quot;/upload/images/Table%202%20Provisional%20Estimates%20of%20National%20Income%20and%20Expenditure%20Components%20of%20GDP%20various%20years%20at%202011-12%20Prices.png&quot; style=&quot;height:523px; width:1050px&quot; /&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Source:&lt;/strong&gt; &lt;strong&gt;**&lt;/strong&gt; Press Note on Provisional Estimates of Annual National Income 2021-22 and Quarterly Estimates of Gross Domestic Product for the Fourth Quarter (Q4) of 2021-22, released on 31 May 2022, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;#&lt;/strong&gt; Press Note on First Advance Estimates of National Income 2020-21, released on 7 January, 2021, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;## &lt;/strong&gt;Press Note on First Advance Estimates of National Income 2019-20, released on 7 January, 2020, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;#* &lt;/strong&gt;Press Note on First Advance Estimates of National Income 2018-19, released on 7 January, 2019, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;^* &lt;/strong&gt;Press Note on First Advance Estimates of National Income 2017-18, released on 5 January, 2018, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;^^ &lt;/strong&gt;Press Note on Provisional Estimates of National Income 2016-17, released on 31 May, 2017, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/em&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;em&gt;&lt;strong&gt;Note: &lt;/strong&gt;Kindly &lt;a href=&quot;https://docs.google.com/spreadsheets/d/1aiEDfCYkTynV-ucq46fwJKffZosApMMk/edit?usp=sharing&amp;amp;ouid=112233925171588304692&amp;amp;rtpof=true&amp;amp;sd=true&quot; title=&quot;https://docs.google.com/spreadsheets/d/1aiEDfCYkTynV-ucq46fwJKffZosApMMk/edit?usp=sharing&amp;amp;ouid=112233925171588304692&amp;amp;rtpof=true&amp;amp;sd=true&quot;&gt;click here&lt;/a&gt; to access the data in a spreadsheet&lt;/em&gt;&lt;br /&gt;&lt;strong&gt;---&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;As compared to the 3-year average of the PFCE &lt;em&gt;(at constant prices)&lt;/em&gt; pertaining to 2017-18, 2018-19, and 2019-20 &lt;em&gt;(2nd RE)&lt;/em&gt;, the real PFCE in 2020-21 &lt;em&gt;(1st RE)&lt;/em&gt; and 2021-22 &lt;em&gt;(PE)&lt;/em&gt; grew by -1.25 percent and 6.56 percent, respectively. The advance estimates of GDP &lt;em&gt;(at 2011-12 prices) &lt;/em&gt;for 2022-23 would be released in January next year. Till then, we will have to wait for commenting further about the sustained growth of consumer demand. &lt;a href=&quot;https://www.mse.ac.in/wp-content/uploads/2020/02/Ind-exp.-dec-13-Mind-the-statistics-gap.pdf&quot; title=&quot;https://www.mse.ac.in/wp-content/uploads/2020/02/Ind-exp.-dec-13-Mind-the-statistics-gap.pdf&quot;&gt;Experts have suggested&lt;/a&gt; that in order to gauge consumer demand and income poverty, consumption expenditure survey of households by the National Statistical Office (NSO) needs to be done and the results are required to be published along with the release of&amp;nbsp;unit-level data. It is worth noting that the &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;gap between the National Accounts Statistics (NAS)&lt;/a&gt; &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;estimates of PFCE&lt;/a&gt; and the &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;National Sample Survey (NSS)&lt;/a&gt; &lt;a href=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;estimates of household consumption expenditure&lt;/a&gt;&amp;nbsp;&lt;em&gt;(aggregated at the national level)&lt;/em&gt; has grown progressively over the years.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;An alternative perspective&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;As said earlier, the y-o-y growth of GDP at constant prices during Q1 of 2022-23 was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot; title=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;13.5 percent&lt;/a&gt;, whereas the y-o-y growth of GDP at current prices during the same period was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot; title=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;26.7 percent&lt;/a&gt;. It means that the GDP deflator grew y-o-y by 13.2 percent.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Likewise, the y-o-y growth of real Gross Value Added (GVA) at basic prices during Q1 of 2022-23 was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot; title=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;12.7 percent&lt;/a&gt;, whereas the y-o-y growth of GVA at basic prices at current prices during the same period was &lt;a href=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot; title=&quot;https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;26.5 percent&lt;/a&gt;. So, the GVA deflator grew y-o-y by 13.8 percent.&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;In order to arrive at GDP at constant prices from GDP at current prices, one needs a deflator. In the case of &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot; title=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;single deflation method&lt;/a&gt;, a common price deflator is utilised to adjust both input and output prices. For &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot; title=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;double deflation method&lt;/a&gt;, one needs two different deflators for adjusting input and output prices. In India, double deflation is done for agriculture, and mining and quarrying, whereas single deflation is used for other sectors. Thus, in &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot; title=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;our country, a mix&lt;/a&gt; of single and double deflation methods is used. &amp;nbsp;&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;A &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot; title=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;recent analysis&lt;/a&gt; by Pragya Srivastava, published in Livemint.com, tells us that the GDP deflator on an average reflects 70 percent of the Wholesale Price Index (WPI) and 30 percent of the Consumer Price Index (CPI). As per HSBC Global Research, input prices &lt;em&gt;(reflected by WPI rise) &lt;/em&gt;in the Q1 of 2022-23 have grown faster than the output prices &lt;em&gt;(indicated by the CPI increase)&lt;/em&gt;, possibly leading to an underestimation of GVA growth, and therefore GDP growth. Remember, &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot; title=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;GDP at market prices&lt;/a&gt; is derived as the &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot; title=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;sum of the GVA at basic prices&lt;/a&gt;, &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot; title=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;plus all taxes on products&lt;/a&gt;, &lt;a href=&quot;https://pib.gov.in/PressReleasePage.aspx?PRID=1723153&quot; title=&quot;https://pib.gov.in/PressReleasePage.aspx?PRID=1723153&quot;&gt;less all subsidies on products&lt;/a&gt;. In the case of single deflation method, if input &lt;em&gt;(indicated by WPI) &lt;/em&gt;and output &lt;em&gt;(reflected by CPI)&lt;/em&gt; prices expand at different rates, then it may cause overestimation or underestimation of economic performance.&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;A technical discussion by Jyoti Sharma &lt;em&gt;(please click &lt;a href=&quot;https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html&quot; title=&quot;https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html&quot;&gt;here&lt;/a&gt; and &lt;a href=&quot;https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html&quot; title=&quot;https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html&quot;&gt;here&lt;/a&gt; to access)&lt;/em&gt; informs us that ideally, the GDP deflator of the MoSPI lies in the range {min. (CPI, WPI), max. (CPI, WPI)} i.e., the deflator must fall in the range defined by minimum of CPI and WPI and maximum of CPI and WPI for a sector. She proposes that in the case of double deflation method, CPI as a deflator for output value, and WPI for input value should be used. Instead of going for mix method, which India uses, one should go for either single or double deflation method across the sectors and sub-sectors in order to compare the trends across sectors.&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;&lt;em&gt;References:&amp;nbsp;&lt;/em&gt;&lt;/strong&gt;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2022-23, released on 31 August, 2022, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2022-23.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2021-22, released on 31 August, 2021, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2021-22.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2021-22.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2020-21, released on 31 August, 2020, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2019-20, released on 30 August, 2019, MoSPI, please &lt;a href=&quot;/upload/files/PRESS_NOTE-Q1_2019-20.pdf&quot; title=&quot;/upload/files/PRESS_NOTE-Q1_2019-20.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Vahan registration website,&amp;nbsp;Ministry of Road Transport and Highways,&amp;nbsp;please &lt;a href=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot; title=&quot;https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Provisional Estimates of Annual National Income 2021-22 and Quarterly Estimates of Gross Domestic Product for the Fourth Quarter (Q4) of 2021-22, released on 31 May 2022, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2020-21, released on 7 January, 2021, MoSPI, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2019-20, released on 7 January, 2020, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2018-19, released on 7 January, 2019, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on First Advance Estimates of National Income 2017-18, released on 5 January, 2018, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf&quot;&gt;click here&lt;/a&gt; to access &amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press Note on Provisional Estimates of National Income 2016-17, released on 31 May, 2017, please &lt;a href=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf&quot; title=&quot;/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Press release: Provisional estimates of Annual National Income, 2020-21 and Quarterly estimates (Q4) of Gross Domestic Product, 2020-21, Ministry of Statistics &amp;amp; Programme Implementation, Press Information Bureau, released on 31 May, 2021, please click &lt;a href=&quot;https://pib.gov.in/PressReleasePage.aspx?PRID=1723153&quot; title=&quot;https://pib.gov.in/PressReleasePage.aspx?PRID=1723153&quot;&gt;here&lt;/a&gt; and &lt;a href=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot; title=&quot;/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf&quot;&gt;here&lt;/a&gt; to access &amp;nbsp;&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Estimates of Food Consumption Expenditure from Household Surveys and National Accounts -AC Kulshreshtha and Aloke Kar, Central Statistical Organisation (CSO), please &lt;a href=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot; title=&quot;https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Is the GDP number an underestimate? -Pragya Srivastava, Livemint.com, 2 September, 2022, please &lt;a href=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot; title=&quot;https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html&quot;&gt;click here&lt;/a&gt; to access&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;The Real Story Behind India&amp;rsquo;s Two Wheeler Sales or Rather the Lack of It -Vivek Kaul, 19 November, 2020, please &lt;a href=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot; title=&quot;https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;Mind the statistics gap -C Rangarajan and S Mahendra Dev, The Indian Express, 13 December, 2019, please &lt;a href=&quot;https://bit.ly/3Dsq9y2&quot; title=&quot;https://bit.ly/3Dsq9y2&quot;&gt;click here&lt;/a&gt; to access&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;India&amp;rsquo;s GDP: Deflating the right way -Jyoti Sharma, Ideas for India, 12 October, 2017, please &lt;a href=&quot;https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html&quot; title=&quot;https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html&quot;&gt;click here&lt;/a&gt; to access&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;India&amp;rsquo;s GDP: Deflating the right way -Jyoti Sharma, Livemint.com, 12 October, 2017, please &lt;a href=&quot;https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html&quot; title=&quot;https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html&quot;&gt;click here&lt;/a&gt; to access&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&amp;nbsp;&lt;/p&gt;&lt;p style=&quot;text-align:justify&quot;&gt;&lt;strong&gt;Image Courtesy: Inclusive Media for Change/ Shambhu Ghatak&lt;/strong&gt;&lt;/p&gt;&#039;
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                <strong>Realistic analysis shows that the Indian economy has simply taken little steps in Q1 instead of a quantum leap</strong></h1>
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                <p style="text-align:justify">There is euphoria abound about India&#39;s growth performance during the first quarter of the current fiscal. As compared to the corresponding period last year, the year-on-year (y-o-y) GDP growth in the first quarter (Q1) of 2022-23 is down. However, one should take into account the fact that the high growth performance of the real GDP in Q1 of 2021-22 was due to the low base in the corresponding period of the first pandemic year. The optimism surrounding y-o-y&nbsp;real GDP growth in the first quarter this year therefore appears to be natural.&nbsp;</p><p style="text-align:justify">On further delving into the data, it can be discovered that after two years of the pandemic, the GDP in the Q1 of the current fiscal, crossed the GDP figure corresponding to the Q1 of 2019-20. Please see chart-1.&nbsp;</p><p style="text-align:justify"><img alt="" src="/upload/images/Chart%201%20Quarterly%20Estimates%20of%20Expenditure%20Components%20of%20GDP%20for%20Q1%20at%202011-12%20Prices%20in%20Rs.%20Crore%281%29.png" style="height:687px; width:997px" /></p><p style="text-align:justify"><em><strong>Source: **</strong> Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2022-23, released on 31 August, 2022, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2022-23.pdf" title="/upload/files/PRESS_NOTE-Q1_2022-23.pdf">click here</a> to access&nbsp;</em></p><p style="text-align:justify"><em><strong>*</strong> Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2021-22, released on 31 August, 2021, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2021-22.pdf" title="/upload/files/PRESS_NOTE-Q1_2021-22.pdf">click here</a> to access &nbsp;</em></p><p style="text-align:justify"><em><strong>##</strong> Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2020-21, released on 31 August, 2020, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf" title="/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf">click here</a> to access&nbsp;</em></p><p style="text-align:justify"><em><strong># </strong>Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2019-20, released on 30 August, 2019, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2019-20.pdf" title="/upload/files/PRESS_NOTE-Q1_2019-20.pdf">click here</a> to access&nbsp;</em></p><p style="text-align:justify"><em><strong>Note: </strong>Kindly <a href="https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423" title="https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423">click here</a> to access the data in a spreadsheet</em><br /><strong>---</strong></p><p style="text-align:justify">Growth in the real GDP is vital because it provides the government with additional revenue to spend. When the economy expands, it signifies that the economic activities are reaching the level as they existed during the normal times i.e., before the pandemic had struck. With the return of the economy to normalcy, employment generation is expected to take place. Employment creation can lead to a resurgence in effective demand i.e., purchasing power.</p><p style="text-align:justify"><strong>Measuring real GDP growth after 2 years of the pandemic</strong></p><p style="text-align:justify">The GDP at constant prices expanded by <a href="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022.pdf" title="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022.pdf">4.1 percent in the last quarter (Q4)</a> of 2021-22. While the real economy grew y-o-y by 13.51 percent in the Q1 as compared to a y-o-y real GDP growth of 20.08 percent in the corresponding period last year, a different picture emerges when the base is shifted to Q1 GDP in the pre-covid times. As compared to the 3-year average of the Q1 GDP pertaining to 2017-18, 2018-19, and 2019-20, the real GDP in the first quarter of the current fiscal expanded by 9.58 percent i.e., less than the y-o-y growth of 13.51 percent. Please take a&nbsp;look at table-1.&nbsp;</p><p style="text-align:justify"><strong>Table 1: Quarterly Estimates of Expenditure Components of GDP for Q1 (April-June) at 2011-12 Prices, various years (in Rs. Crore)</strong></p><p style="text-align:justify"><img alt="" src="/upload/images/Table%201%20Quarterly%20Estimates%20of%20Expenditure%20Components%20of%20GDP%20for%20Q1%20at%202011-12%20Prices%20in%20Rs.%20Crore.png" style="height:309px; width:874px" /></p><p style="text-align:justify"><em><strong>Source: </strong>Same as chart-1<br /><strong>Note: </strong>Kindly <a href="https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423" title="https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423">click here</a> to access the data in a spreadsheet</em><br /><strong>---</strong></p><p style="text-align:justify">As compared to the 3-year average of the GDP during the first quarter of 2017-18, 2018-19 and 2019-20, the real GDP in the corresponding period last year contracted by 3.46 percent. As opposed to that, the y-o-y GDP expansion was to the tune of 20.08 percent in Q1 of 2021-22. Thus, the real GDP growth changes with the change in base and also the base year.</p><p style="text-align:justify"><strong>All the high frequency indicators aren&rsquo;t moving in the same direction</strong></p><p style="text-align:justify">After the completion of the first quarter of the current fiscal, the Ministry of Statistics and Programme Implementation (MoSPI) has provided the first estimate of the Q1&rsquo;s GDP. On the basis of about <a href="/upload/files/High%20frequency%20indicators.png" title="/upload/files/High%20frequency%20indicators.png">20 high frequency indicators</a>, the sector-wise estimates have been compiled by the ministry. Out of the 20 indicators, in the case of &#39;total telephone subscribers&#39; <em>(-2.5 percent)</em>, &#39;cargo handled at airports&#39; <em>(-1.7 percent)</em>, and &#39;Index of Industrial Production (IIP) pertaining to metallic minerals&#39; <em>(-6.5 percent)</em>, there has been y-o-y contractions in Q1 of 2022-23 as opposed to positive growths in the corresponding period last year. &nbsp;</p><p style="text-align:justify">In the case of certain high frequency indicators like &#39;production of cement&#39;, &#39;consumption of steel&#39;, &#39;sales of commercial vehicles&#39;, &#39;purchase of private vehicles&#39;, &#39;cargo handled at major sea ports&#39;, &#39;passengers handled at airports&#39;, &#39;IIP pertaining to mining and manufacturing&#39;, &#39;net tonne kilometer - railways&#39;, etc., the y-o-y percentage growth has reduced between Q1 of 2021-22 and Q1 of 2022-23.</p><p style="text-align:justify"><strong>Two-wheeler sale to the average Indian citizen still down</strong></p><p style="text-align:justify">Some economists tend to use the data on two-wheeler sale, which is provided by the industry body <a href="https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/" title="https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/">Society of Indian Automobile Manufacturers (SIAM)</a>. However, the SIAM data is related to the number of units which is <a href="https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/" title="https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/">sold by the manufacturers to dealers</a> across the country. During economic slowdown, dealers may be unable to sell the products they purchase from manufacturers, which could lead to building up of inventory with the former. Hence, the SIAM data may not capture the real situation i.e., the number of two-wheelers bought by the final consumers.&nbsp;</p><p style="text-align:justify"><img alt="" src="/upload/images/Chart%202%20Two%20wheeler%20vehicles%20registered%20in%20Q1%20of%20various%20years.png" style="height:555px; width:780px" /></p><p style="text-align:justify"><em><strong>Source: </strong>Vahan registration website,&nbsp;Ministry of Road Transport and Highways,&nbsp;please <a href="https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml" title="https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml">click here</a> to access&nbsp;<br /><strong>Note: </strong>Kindly <a href="https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423" title="https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423">click here</a> to access the data in a spreadsheet</em><br /><strong>---</strong></p><p style="text-align:justify">Instead of using SIAM data on two-wheeler sale, the data&nbsp;that is provided by <a href="https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml" title="https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml">Vahan dashboard</a> on vehicle registration, is used in the present piece. As compared to the 3-year average of the number of two-wheelers <em>(sum of non-transport and transport-two-wheelers) </em>registered during April-June of 2017, 2018 and 2019, the number of two-wheeler vehicles registered in the first quarters of 2020, 2021 and 2022 has been lower. In short, if the number of two-wheelers registered is used for analysis, then it shows that the purchasing power of the average Indian consumer has still not reached the pre-pandemic level.&nbsp;Please have a look at chart-2.&nbsp;</p><p style="text-align:justify"><strong>Whatever happened to consumer demand?</strong></p><p style="text-align:justify">The Private Final Consumption Expenditure (PFCE) <a href="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF" title="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">represents the value of goods and services</a> <a href="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF" title="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">consumed by the households</a> and <a href="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF" title="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">the private non-profit institutions</a> <a href="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF" title="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">serving households (NPISHs)</a> in the period extending from the beginning of April of one calendar year to the end of March of the next. In 2021-22 <em>(provisional estimates)</em>, PFCE&nbsp;i.e., final consumer spending <em>(at 2011-12 prices) </em>as a proportion of GDP <em>(at 2011-12 prices) </em>was 56.85 percent. Therefore, the revival of consumer demand is essential for boosting economic growth. The y-o-y growth rates of PFCE <em>(at constant prices) </em>were 8.88 percent in 2017-18, 6.61 percent in 2018-19, and 4.45 percent in 2019-20 <em>(2nd revised estimates)</em>. However, the y-o-y growth rates of PFCE <em>(at constant price)</em> dipped to -6.0 percent in 2020-21 <em>(1st RE)</em> but bounced back to 7.91 percent in 2021-22 <em>(PE)</em>. Please see table-2.</p><p style="text-align:justify"><strong>Table 2: Provisional Estimates of National Income and Expenditure Components of GDP, various years (at 2011- 12 Prices)</strong></p><p style="text-align:justify"><img alt="" src="/upload/images/Table%202%20Provisional%20Estimates%20of%20National%20Income%20and%20Expenditure%20Components%20of%20GDP%20various%20years%20at%202011-12%20Prices.png" style="height:523px; width:1050px" /></p><p style="text-align:justify"><em><strong>Source:</strong> <strong>**</strong> Press Note on Provisional Estimates of Annual National Income 2021-22 and Quarterly Estimates of Gross Domestic Product for the Fourth Quarter (Q4) of 2021-22, released on 31 May 2022, MoSPI, please <a href="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf" title="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf">click here</a> to access &nbsp;</em></p><p style="text-align:justify"><em><strong>#</strong> Press Note on First Advance Estimates of National Income 2020-21, released on 7 January, 2021, MoSPI, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf" title="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf">click here</a> to access &nbsp;</em></p><p style="text-align:justify"><em><strong>## </strong>Press Note on First Advance Estimates of National Income 2019-20, released on 7 January, 2020, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf" title="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf">click here</a> to access &nbsp;</em></p><p style="text-align:justify"><em><strong>#* </strong>Press Note on First Advance Estimates of National Income 2018-19, released on 7 January, 2019, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf" title="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf">click here</a> to access &nbsp;</em></p><p style="text-align:justify"><em><strong>^* </strong>Press Note on First Advance Estimates of National Income 2017-18, released on 5 January, 2018, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf" title="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf">click here</a> to access &nbsp;</em></p><p style="text-align:justify"><em><strong>^^ </strong>Press Note on Provisional Estimates of National Income 2016-17, released on 31 May, 2017, please <a href="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf" title="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf">click here</a> to access&nbsp;</em></p><p style="text-align:justify"><em><strong>Note: </strong>Kindly <a href="https://docs.google.com/spreadsheets/d/1aiEDfCYkTynV-ucq46fwJKffZosApMMk/edit?usp=sharing&amp;ouid=112233925171588304692&amp;rtpof=true&amp;sd=true" title="https://docs.google.com/spreadsheets/d/1aiEDfCYkTynV-ucq46fwJKffZosApMMk/edit?usp=sharing&amp;ouid=112233925171588304692&amp;rtpof=true&amp;sd=true">click here</a> to access the data in a spreadsheet</em><br /><strong>---</strong></p><p style="text-align:justify">As compared to the 3-year average of the PFCE <em>(at constant prices)</em> pertaining to 2017-18, 2018-19, and 2019-20 <em>(2nd RE)</em>, the real PFCE in 2020-21 <em>(1st RE)</em> and 2021-22 <em>(PE)</em> grew by -1.25 percent and 6.56 percent, respectively. The advance estimates of GDP <em>(at 2011-12 prices) </em>for 2022-23 would be released in January next year. Till then, we will have to wait for commenting further about the sustained growth of consumer demand. <a href="https://www.mse.ac.in/wp-content/uploads/2020/02/Ind-exp.-dec-13-Mind-the-statistics-gap.pdf" title="https://www.mse.ac.in/wp-content/uploads/2020/02/Ind-exp.-dec-13-Mind-the-statistics-gap.pdf">Experts have suggested</a> that in order to gauge consumer demand and income poverty, consumption expenditure survey of households by the National Statistical Office (NSO) needs to be done and the results are required to be published along with the release of&nbsp;unit-level data. It is worth noting that the <a href="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF" title="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">gap between the National Accounts Statistics (NAS)</a> <a href="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF" title="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">estimates of PFCE</a> and the <a href="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF" title="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">National Sample Survey (NSS)</a> <a href="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF" title="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">estimates of household consumption expenditure</a>&nbsp;<em>(aggregated at the national level)</em> has grown progressively over the years.&nbsp;</p><p style="text-align:justify"><strong>An alternative perspective</strong></p><p style="text-align:justify">As said earlier, the y-o-y growth of GDP at constant prices during Q1 of 2022-23 was <a href="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf" title="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf">13.5 percent</a>, whereas the y-o-y growth of GDP at current prices during the same period was <a href="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf" title="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf">26.7 percent</a>. It means that the GDP deflator grew y-o-y by 13.2 percent.&nbsp;</p><p style="text-align:justify">Likewise, the y-o-y growth of real Gross Value Added (GVA) at basic prices during Q1 of 2022-23 was <a href="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf" title="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf">12.7 percent</a>, whereas the y-o-y growth of GVA at basic prices at current prices during the same period was <a href="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf" title="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf">26.5 percent</a>. So, the GVA deflator grew y-o-y by 13.8 percent.&nbsp;</p><p style="text-align:justify">In order to arrive at GDP at constant prices from GDP at current prices, one needs a deflator. In the case of <a href="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html" title="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html">single deflation method</a>, a common price deflator is utilised to adjust both input and output prices. For <a href="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html" title="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html">double deflation method</a>, one needs two different deflators for adjusting input and output prices. In India, double deflation is done for agriculture, and mining and quarrying, whereas single deflation is used for other sectors. Thus, in <a href="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html" title="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html">our country, a mix</a> of single and double deflation methods is used. &nbsp;&nbsp;</p><p style="text-align:justify">A <a href="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html" title="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html">recent analysis</a> by Pragya Srivastava, published in Livemint.com, tells us that the GDP deflator on an average reflects 70 percent of the Wholesale Price Index (WPI) and 30 percent of the Consumer Price Index (CPI). As per HSBC Global Research, input prices <em>(reflected by WPI rise) </em>in the Q1 of 2022-23 have grown faster than the output prices <em>(indicated by the CPI increase)</em>, possibly leading to an underestimation of GVA growth, and therefore GDP growth. Remember, <a href="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf" title="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf">GDP at market prices</a> is derived as the <a href="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf" title="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf">sum of the GVA at basic prices</a>, <a href="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf" title="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf">plus all taxes on products</a>, <a href="https://pib.gov.in/PressReleasePage.aspx?PRID=1723153" title="https://pib.gov.in/PressReleasePage.aspx?PRID=1723153">less all subsidies on products</a>. In the case of single deflation method, if input <em>(indicated by WPI) </em>and output <em>(reflected by CPI)</em> prices expand at different rates, then it may cause overestimation or underestimation of economic performance.</p><p style="text-align:justify">A technical discussion by Jyoti Sharma <em>(please click <a href="https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html" title="https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html">here</a> and <a href="https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html" title="https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html">here</a> to access)</em> informs us that ideally, the GDP deflator of the MoSPI lies in the range {min. (CPI, WPI), max. (CPI, WPI)} i.e., the deflator must fall in the range defined by minimum of CPI and WPI and maximum of CPI and WPI for a sector. She proposes that in the case of double deflation method, CPI as a deflator for output value, and WPI for input value should be used. Instead of going for mix method, which India uses, one should go for either single or double deflation method across the sectors and sub-sectors in order to compare the trends across sectors.</p><p style="text-align:justify"><strong><em>References:&nbsp;</em></strong></p><p style="text-align:justify">Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2022-23, released on 31 August, 2022, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2022-23.pdf" title="/upload/files/PRESS_NOTE-Q1_2022-23.pdf">click here</a> to access&nbsp;</p><p style="text-align:justify">Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2021-22, released on 31 August, 2021, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2021-22.pdf" title="/upload/files/PRESS_NOTE-Q1_2021-22.pdf">click here</a> to access &nbsp;</p><p style="text-align:justify">Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2020-21, released on 31 August, 2020, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf" title="/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf">click here</a> to access&nbsp;</p><p style="text-align:justify">Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2019-20, released on 30 August, 2019, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2019-20.pdf" title="/upload/files/PRESS_NOTE-Q1_2019-20.pdf">click here</a> to access&nbsp;</p><p style="text-align:justify">Vahan registration website,&nbsp;Ministry of Road Transport and Highways,&nbsp;please <a href="https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml" title="https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml">click here</a> to access&nbsp;</p><p style="text-align:justify">Press Note on Provisional Estimates of Annual National Income 2021-22 and Quarterly Estimates of Gross Domestic Product for the Fourth Quarter (Q4) of 2021-22, released on 31 May 2022, MoSPI, please <a href="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf" title="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf">click here</a> to access &nbsp;</p><p style="text-align:justify">Press Note on First Advance Estimates of National Income 2020-21, released on 7 January, 2021, MoSPI, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf" title="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf">click here</a> to access &nbsp;</p><p style="text-align:justify">Press Note on First Advance Estimates of National Income 2019-20, released on 7 January, 2020, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf" title="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf">click here</a> to access &nbsp;</p><p style="text-align:justify">Press Note on First Advance Estimates of National Income 2018-19, released on 7 January, 2019, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf" title="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf">click here</a> to access &nbsp;</p><p style="text-align:justify">Press Note on First Advance Estimates of National Income 2017-18, released on 5 January, 2018, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf" title="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf">click here</a> to access &nbsp;</p><p style="text-align:justify">Press Note on Provisional Estimates of National Income 2016-17, released on 31 May, 2017, please <a href="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf" title="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf">click here</a> to access&nbsp;</p><p style="text-align:justify">Press release: Provisional estimates of Annual National Income, 2020-21 and Quarterly estimates (Q4) of Gross Domestic Product, 2020-21, Ministry of Statistics &amp; Programme Implementation, Press Information Bureau, released on 31 May, 2021, please click <a href="https://pib.gov.in/PressReleasePage.aspx?PRID=1723153" title="https://pib.gov.in/PressReleasePage.aspx?PRID=1723153">here</a> and <a href="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf" title="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf">here</a> to access &nbsp;&nbsp;</p><p style="text-align:justify">Estimates of Food Consumption Expenditure from Household Surveys and National Accounts -AC Kulshreshtha and Aloke Kar, Central Statistical Organisation (CSO), please <a href="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF" title="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">click here</a> to access&nbsp;</p><p style="text-align:justify">Is the GDP number an underestimate? -Pragya Srivastava, Livemint.com, 2 September, 2022, please <a href="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html" title="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html">click here</a> to access</p><p style="text-align:justify">The Real Story Behind India&rsquo;s Two Wheeler Sales or Rather the Lack of It -Vivek Kaul, 19 November, 2020, please <a href="https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/" title="https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/">click here</a> to access&nbsp;</p><p style="text-align:justify">Mind the statistics gap -C Rangarajan and S Mahendra Dev, The Indian Express, 13 December, 2019, please <a href="https://bit.ly/3Dsq9y2" title="https://bit.ly/3Dsq9y2">click here</a> to access&nbsp;</p><p style="text-align:justify">India&rsquo;s GDP: Deflating the right way -Jyoti Sharma, Ideas for India, 12 October, 2017, please <a href="https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html" title="https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html">click here</a> to access</p><p style="text-align:justify">India&rsquo;s GDP: Deflating the right way -Jyoti Sharma, Livemint.com, 12 October, 2017, please <a href="https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html" title="https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html">click here</a> to access</p><p style="text-align:justify">&nbsp;</p><p style="text-align:justify"><strong>Image Courtesy: Inclusive Media for Change/ Shambhu Ghatak</strong></p>               </font>
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		'id' => (int) 63693,
		'title' => 'Realistic analysis shows that the Indian economy has simply taken little steps in Q1 instead of a quantum leap',
		'subheading' => null,
		'description' => '<p style="text-align:justify">There is euphoria abound about India&#39;s growth performance during the first quarter of the current fiscal. As compared to the corresponding period last year, the year-on-year (y-o-y) GDP growth in the first quarter (Q1) of 2022-23 is down. However, one should take into account the fact that the high growth performance of the real GDP in Q1 of 2021-22 was due to the low base in the corresponding period of the first pandemic year. The optimism surrounding y-o-y&nbsp;real GDP growth in the first quarter this year therefore appears to be natural.&nbsp;</p>

<p style="text-align:justify">On further delving into the data, it can be discovered that after two years of the pandemic, the GDP in the Q1 of the current fiscal, crossed the GDP figure corresponding to the Q1 of 2019-20. Please see chart-1.&nbsp;</p>

<p style="text-align:justify"><img alt="" src="/upload/images/Chart%201%20Quarterly%20Estimates%20of%20Expenditure%20Components%20of%20GDP%20for%20Q1%20at%202011-12%20Prices%20in%20Rs.%20Crore%281%29.png" style="height:687px; width:997px" /></p>

<p style="text-align:justify"><em><strong>Source: **</strong> Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2022-23, released on 31 August, 2022, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2022-23.pdf">click here</a> to access&nbsp;</em></p>

<p style="text-align:justify"><em><strong>*</strong> Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2021-22, released on 31 August, 2021, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2021-22.pdf">click here</a> to access &nbsp;</em></p>

<p style="text-align:justify"><em><strong>##</strong> Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2020-21, released on 31 August, 2020, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf">click here</a> to access&nbsp;</em></p>

<p style="text-align:justify"><em><strong># </strong>Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2019-20, released on 30 August, 2019, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2019-20.pdf">click here</a> to access&nbsp;</em></p>

<p style="text-align:justify"><em><strong>Note: </strong>Kindly <a href="https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423">click here</a> to access the data in a spreadsheet</em><br />
<strong>---</strong></p>

<p style="text-align:justify">Growth in the real GDP is vital because it provides the government with additional revenue to spend. When the economy expands, it signifies that the economic activities are reaching the level as they existed during the normal times i.e., before the pandemic had struck. With the return of the economy to normalcy, employment generation is expected to take place. Employment creation can lead to a resurgence in effective demand i.e., purchasing power.</p>

<p style="text-align:justify"><strong>Measuring real GDP growth after 2 years of the pandemic</strong></p>

<p style="text-align:justify">The GDP at constant prices expanded by <a href="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022.pdf">4.1 percent in the last quarter (Q4)</a> of 2021-22. While the real economy grew y-o-y by 13.51 percent in the Q1 as compared to a y-o-y real GDP growth of 20.08 percent in the corresponding period last year, a different picture emerges when the base is shifted to Q1 GDP in the pre-covid times. As compared to the 3-year average of the Q1 GDP pertaining to 2017-18, 2018-19, and 2019-20, the real GDP in the first quarter of the current fiscal expanded by 9.58 percent i.e., less than the y-o-y growth of 13.51 percent. Please take a&nbsp;look at table-1.&nbsp;</p>

<p style="text-align:justify"><strong>Table 1: Quarterly Estimates of Expenditure Components of GDP for Q1 (April-June) at 2011-12 Prices, various years (in Rs. Crore)</strong></p>

<p style="text-align:justify"><img alt="" src="/upload/images/Table%201%20Quarterly%20Estimates%20of%20Expenditure%20Components%20of%20GDP%20for%20Q1%20at%202011-12%20Prices%20in%20Rs.%20Crore.png" style="height:309px; width:874px" /></p>

<p style="text-align:justify"><em><strong>Source: </strong>Same as chart-1<br />
<strong>Note: </strong>Kindly <a href="https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423">click here</a> to access the data in a spreadsheet</em><br />
<strong>---</strong></p>

<p style="text-align:justify">As compared to the 3-year average of the GDP during the first quarter of 2017-18, 2018-19 and 2019-20, the real GDP in the corresponding period last year contracted by 3.46 percent. As opposed to that, the y-o-y GDP expansion was to the tune of 20.08 percent in Q1 of 2021-22. Thus, the real GDP growth changes with the change in base and also the base year.</p>

<p style="text-align:justify"><strong>All the high frequency indicators aren&rsquo;t moving in the same direction</strong></p>

<p style="text-align:justify">After the completion of the first quarter of the current fiscal, the Ministry of Statistics and Programme Implementation (MoSPI) has provided the first estimate of the Q1&rsquo;s GDP. On the basis of about <a href="/upload/files/High%20frequency%20indicators.png">20 high frequency indicators</a>, the sector-wise estimates have been compiled by the ministry. Out of the 20 indicators, in the case of &#39;total telephone subscribers&#39; <em>(-2.5 percent)</em>, &#39;cargo handled at airports&#39; <em>(-1.7 percent)</em>, and &#39;Index of Industrial Production (IIP) pertaining to metallic minerals&#39; <em>(-6.5 percent)</em>, there has been y-o-y contractions in Q1 of 2022-23 as opposed to positive growths in the corresponding period last year. &nbsp;</p>

<p style="text-align:justify">In the case of certain high frequency indicators like &#39;production of cement&#39;, &#39;consumption of steel&#39;, &#39;sales of commercial vehicles&#39;, &#39;purchase of private vehicles&#39;, &#39;cargo handled at major sea ports&#39;, &#39;passengers handled at airports&#39;, &#39;IIP pertaining to mining and manufacturing&#39;, &#39;net tonne kilometer - railways&#39;, etc., the y-o-y percentage growth has reduced between Q1 of 2021-22 and Q1 of 2022-23.</p>

<p style="text-align:justify"><strong>Two-wheeler sale to the average Indian citizen still down</strong></p>

<p style="text-align:justify">Some economists tend to use the data on two-wheeler sale, which is provided by the industry body <a href="https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/">Society of Indian Automobile Manufacturers (SIAM)</a>. However, the SIAM data is related to the number of units which is <a href="https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/">sold by the manufacturers to dealers</a> across the country. During economic slowdown, dealers may be unable to sell the products they purchase from manufacturers, which could lead to building up of inventory with the former. Hence, the SIAM data may not capture the real situation i.e., the number of two-wheelers bought by the final consumers.&nbsp;</p>

<p style="text-align:justify"><img alt="" src="/upload/images/Chart%202%20Two%20wheeler%20vehicles%20registered%20in%20Q1%20of%20various%20years.png" style="height:555px; width:780px" /></p>

<p style="text-align:justify"><em><strong>Source: </strong>Vahan registration website,&nbsp;Ministry of Road Transport and Highways,&nbsp;please <a href="https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml">click here</a> to access&nbsp;<br />
<strong>Note: </strong>Kindly <a href="https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423">click here</a> to access the data in a spreadsheet</em><br />
<strong>---</strong></p>

<p style="text-align:justify">Instead of using SIAM data on two-wheeler sale, the data&nbsp;that is provided by <a href="https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml">Vahan dashboard</a> on vehicle registration, is used in the present piece. As compared to the 3-year average of the number of two-wheelers <em>(sum of non-transport and transport-two-wheelers) </em>registered during April-June of 2017, 2018 and 2019, the number of two-wheeler vehicles registered in the first quarters of 2020, 2021 and 2022 has been lower. In short, if the number of two-wheelers registered is used for analysis, then it shows that the purchasing power of the average Indian consumer has still not reached the pre-pandemic level.&nbsp;Please have a look at chart-2.&nbsp;</p>

<p style="text-align:justify"><strong>Whatever happened to consumer demand?</strong></p>

<p style="text-align:justify">The Private Final Consumption Expenditure (PFCE) <a href="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">represents the value of goods and services</a> <a href="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">consumed by the households</a> and <a href="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">the private non-profit institutions</a> <a href="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">serving households (NPISHs)</a> in the period extending from the beginning of April of one calendar year to the end of March of the next. In 2021-22 <em>(provisional estimates)</em>, PFCE&nbsp;i.e., final consumer spending <em>(at 2011-12 prices) </em>as a proportion of GDP <em>(at 2011-12 prices) </em>was 56.85 percent. Therefore, the revival of consumer demand is essential for boosting economic growth. The y-o-y growth rates of PFCE <em>(at constant prices) </em>were 8.88 percent in 2017-18, 6.61 percent in 2018-19, and 4.45 percent in 2019-20 <em>(2nd revised estimates)</em>. However, the y-o-y growth rates of PFCE <em>(at constant price)</em> dipped to -6.0 percent in 2020-21 <em>(1st RE)</em> but bounced back to 7.91 percent in 2021-22 <em>(PE)</em>. Please see table-2.</p>

<p style="text-align:justify"><strong>Table 2: Provisional Estimates of National Income and Expenditure Components of GDP, various years (at 2011- 12 Prices)</strong></p>

<p style="text-align:justify"><img alt="" src="/upload/images/Table%202%20Provisional%20Estimates%20of%20National%20Income%20and%20Expenditure%20Components%20of%20GDP%20various%20years%20at%202011-12%20Prices.png" style="height:523px; width:1050px" /></p>

<p style="text-align:justify"><em><strong>Source:</strong> <strong>**</strong> Press Note on Provisional Estimates of Annual National Income 2021-22 and Quarterly Estimates of Gross Domestic Product for the Fourth Quarter (Q4) of 2021-22, released on 31 May 2022, MoSPI, please <a href="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf">click here</a> to access &nbsp;</em></p>

<p style="text-align:justify"><em><strong>#</strong> Press Note on First Advance Estimates of National Income 2020-21, released on 7 January, 2021, MoSPI, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf">click here</a> to access &nbsp;</em></p>

<p style="text-align:justify"><em><strong>## </strong>Press Note on First Advance Estimates of National Income 2019-20, released on 7 January, 2020, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf">click here</a> to access &nbsp;</em></p>

<p style="text-align:justify"><em><strong>#* </strong>Press Note on First Advance Estimates of National Income 2018-19, released on 7 January, 2019, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf">click here</a> to access &nbsp;</em></p>

<p style="text-align:justify"><em><strong>^* </strong>Press Note on First Advance Estimates of National Income 2017-18, released on 5 January, 2018, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf">click here</a> to access &nbsp;</em></p>

<p style="text-align:justify"><em><strong>^^ </strong>Press Note on Provisional Estimates of National Income 2016-17, released on 31 May, 2017, please <a href="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf">click here</a> to access&nbsp;</em></p>

<p style="text-align:justify"><em><strong>Note: </strong>Kindly <a href="https://docs.google.com/spreadsheets/d/1aiEDfCYkTynV-ucq46fwJKffZosApMMk/edit?usp=sharing&amp;ouid=112233925171588304692&amp;rtpof=true&amp;sd=true">click here</a> to access the data in a spreadsheet</em><br />
<strong>---</strong></p>

<p style="text-align:justify">As compared to the 3-year average of the PFCE <em>(at constant prices)</em> pertaining to 2017-18, 2018-19, and 2019-20 <em>(2nd RE)</em>, the real PFCE in 2020-21 <em>(1st RE)</em> and 2021-22 <em>(PE)</em> grew by -1.25 percent and 6.56 percent, respectively. The advance estimates of GDP <em>(at 2011-12 prices) </em>for 2022-23 would be released in January next year. Till then, we will have to wait for commenting further about the sustained growth of consumer demand. <a href="https://www.mse.ac.in/wp-content/uploads/2020/02/Ind-exp.-dec-13-Mind-the-statistics-gap.pdf">Experts have suggested</a> that in order to gauge consumer demand and income poverty, consumption expenditure survey of households by the National Statistical Office (NSO) needs to be done and the results are required to be published along with the release of&nbsp;unit-level data. It is worth noting that the <a href="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">gap between the National Accounts Statistics (NAS)</a> <a href="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">estimates of PFCE</a> and the <a href="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">National Sample Survey (NSS)</a> <a href="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">estimates of household consumption expenditure</a>&nbsp;<em>(aggregated at the national level)</em> has grown progressively over the years.&nbsp;</p>

<p style="text-align:justify"><strong>An alternative perspective</strong></p>

<p style="text-align:justify">As said earlier, the y-o-y growth of GDP at constant prices during Q1 of 2022-23 was <a href="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf">13.5 percent</a>, whereas the y-o-y growth of GDP at current prices during the same period was <a href="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf">26.7 percent</a>. It means that the GDP deflator grew y-o-y by 13.2 percent.&nbsp;</p>

<p style="text-align:justify">Likewise, the y-o-y growth of real Gross Value Added (GVA) at basic prices during Q1 of 2022-23 was <a href="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf">12.7 percent</a>, whereas the y-o-y growth of GVA at basic prices at current prices during the same period was <a href="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf">26.5 percent</a>. So, the GVA deflator grew y-o-y by 13.8 percent.&nbsp;</p>

<p style="text-align:justify">In order to arrive at GDP at constant prices from GDP at current prices, one needs a deflator. In the case of <a href="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html">single deflation method</a>, a common price deflator is utilised to adjust both input and output prices. For <a href="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html">double deflation method</a>, one needs two different deflators for adjusting input and output prices. In India, double deflation is done for agriculture, and mining and quarrying, whereas single deflation is used for other sectors. Thus, in <a href="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html">our country, a mix</a> of single and double deflation methods is used. &nbsp;&nbsp;</p>

<p style="text-align:justify">A <a href="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html">recent analysis</a> by Pragya Srivastava, published in Livemint.com, tells us that the GDP deflator on an average reflects 70 percent of the Wholesale Price Index (WPI) and 30 percent of the Consumer Price Index (CPI). As per HSBC Global Research, input prices <em>(reflected by WPI rise) </em>in the Q1 of 2022-23 have grown faster than the output prices <em>(indicated by the CPI increase)</em>, possibly leading to an underestimation of GVA growth, and therefore GDP growth. Remember, <a href="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf">GDP at market prices</a> is derived as the <a href="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf">sum of the GVA at basic prices</a>, <a href="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf">plus all taxes on products</a>, <a href="https://pib.gov.in/PressReleasePage.aspx?PRID=1723153">less all subsidies on products</a>. In the case of single deflation method, if input <em>(indicated by WPI) </em>and output <em>(reflected by CPI)</em> prices expand at different rates, then it may cause overestimation or underestimation of economic performance.</p>

<p style="text-align:justify">A technical discussion by Jyoti Sharma <em>(please click <a href="https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html">here</a> and <a href="https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html">here</a> to access)</em> informs us that ideally, the GDP deflator of the MoSPI lies in the range {min. (CPI, WPI), max. (CPI, WPI)} i.e., the deflator must fall in the range defined by minimum of CPI and WPI and maximum of CPI and WPI for a sector. She proposes that in the case of double deflation method, CPI as a deflator for output value, and WPI for input value should be used. Instead of going for mix method, which India uses, one should go for either single or double deflation method across the sectors and sub-sectors in order to compare the trends across sectors.</p>

<p style="text-align:justify"><strong><em>References:&nbsp;</em></strong></p>

<p style="text-align:justify">Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2022-23, released on 31 August, 2022, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2022-23.pdf">click here</a> to access&nbsp;</p>

<p style="text-align:justify">Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2021-22, released on 31 August, 2021, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2021-22.pdf">click here</a> to access &nbsp;</p>

<p style="text-align:justify">Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2020-21, released on 31 August, 2020, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf">click here</a> to access&nbsp;</p>

<p style="text-align:justify">Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2019-20, released on 30 August, 2019, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2019-20.pdf">click here</a> to access&nbsp;</p>

<p style="text-align:justify">Vahan registration website,&nbsp;Ministry of Road Transport and Highways,&nbsp;please <a href="https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml">click here</a> to access&nbsp;</p>

<p style="text-align:justify">Press Note on Provisional Estimates of Annual National Income 2021-22 and Quarterly Estimates of Gross Domestic Product for the Fourth Quarter (Q4) of 2021-22, released on 31 May 2022, MoSPI, please <a href="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf">click here</a> to access &nbsp;</p>

<p style="text-align:justify">Press Note on First Advance Estimates of National Income 2020-21, released on 7 January, 2021, MoSPI, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf">click here</a> to access &nbsp;</p>

<p style="text-align:justify">Press Note on First Advance Estimates of National Income 2019-20, released on 7 January, 2020, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf">click here</a> to access &nbsp;</p>

<p style="text-align:justify">Press Note on First Advance Estimates of National Income 2018-19, released on 7 January, 2019, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf">click here</a> to access &nbsp;</p>

<p style="text-align:justify">Press Note on First Advance Estimates of National Income 2017-18, released on 5 January, 2018, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf">click here</a> to access &nbsp;</p>

<p style="text-align:justify">Press Note on Provisional Estimates of National Income 2016-17, released on 31 May, 2017, please <a href="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf">click here</a> to access&nbsp;</p>

<p style="text-align:justify">Press release: Provisional estimates of Annual National Income, 2020-21 and Quarterly estimates (Q4) of Gross Domestic Product, 2020-21, Ministry of Statistics &amp; Programme Implementation, Press Information Bureau, released on 31 May, 2021, please click <a href="https://pib.gov.in/PressReleasePage.aspx?PRID=1723153">here</a> and <a href="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf">here</a> to access &nbsp;&nbsp;</p>

<p style="text-align:justify">Estimates of Food Consumption Expenditure from Household Surveys and National Accounts -AC Kulshreshtha and Aloke Kar, Central Statistical Organisation (CSO), please <a href="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">click here</a> to access&nbsp;</p>

<p style="text-align:justify">Is the GDP number an underestimate? -Pragya Srivastava, Livemint.com, 2 September, 2022, please <a href="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html ">click here</a> to access</p>

<p style="text-align:justify">The Real Story Behind India&rsquo;s Two Wheeler Sales or Rather the Lack of It -Vivek Kaul, 19 November, 2020, please <a href="https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/">click here</a> to access&nbsp;</p>

<p style="text-align:justify">Mind the statistics gap -C Rangarajan and S Mahendra Dev, The Indian Express, 13 December, 2019, please <a href="https://bit.ly/3Dsq9y2">click here</a> to access&nbsp;</p>

<p style="text-align:justify">India&rsquo;s GDP: Deflating the right way -Jyoti Sharma, Ideas for India, 12 October, 2017, please <a href="https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html">click here</a> to access</p>

<p style="text-align:justify">India&rsquo;s GDP: Deflating the right way -Jyoti Sharma, Livemint.com, 12 October, 2017, please <a href="https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html ">click here</a> to access</p>

<p style="text-align:justify">&nbsp;</p>

<p style="text-align:justify"><strong>Image Courtesy: Inclusive Media for Change/ Shambhu Ghatak</strong></p>
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	'metaTitle' => 'NEWS ALERTS | Realistic analysis shows that the Indian economy has simply taken little steps in Q1 instead of a quantum leap',
	'metaKeywords' => 'Consumer Price Index,CPI,GDP at 2011-12 prices,GDP at constant prices,GDP at current prices,GDP deflation,Gross Value Added,GVA at basic prices,Real GDP growth,Wholesale Price Index,WPI',
	'metaDesc' => 'There is euphoria abound about India&#39;s growth performance during the first quarter of the current fiscal. As compared to the corresponding period last year, the year-on-year (y-o-y) GDP growth in the first quarter (Q1) of 2022-23 is down. However, one...',
	'disp' => '<p style="text-align:justify">There is euphoria abound about India&#39;s growth performance during the first quarter of the current fiscal. As compared to the corresponding period last year, the year-on-year (y-o-y) GDP growth in the first quarter (Q1) of 2022-23 is down. However, one should take into account the fact that the high growth performance of the real GDP in Q1 of 2021-22 was due to the low base in the corresponding period of the first pandemic year. The optimism surrounding y-o-y&nbsp;real GDP growth in the first quarter this year therefore appears to be natural.&nbsp;</p><p style="text-align:justify">On further delving into the data, it can be discovered that after two years of the pandemic, the GDP in the Q1 of the current fiscal, crossed the GDP figure corresponding to the Q1 of 2019-20. Please see chart-1.&nbsp;</p><p style="text-align:justify"><img alt="" src="/upload/images/Chart%201%20Quarterly%20Estimates%20of%20Expenditure%20Components%20of%20GDP%20for%20Q1%20at%202011-12%20Prices%20in%20Rs.%20Crore%281%29.png" style="height:687px; width:997px" /></p><p style="text-align:justify"><em><strong>Source: **</strong> Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2022-23, released on 31 August, 2022, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2022-23.pdf" title="/upload/files/PRESS_NOTE-Q1_2022-23.pdf">click here</a> to access&nbsp;</em></p><p style="text-align:justify"><em><strong>*</strong> Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2021-22, released on 31 August, 2021, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2021-22.pdf" title="/upload/files/PRESS_NOTE-Q1_2021-22.pdf">click here</a> to access &nbsp;</em></p><p style="text-align:justify"><em><strong>##</strong> Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2020-21, released on 31 August, 2020, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf" title="/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf">click here</a> to access&nbsp;</em></p><p style="text-align:justify"><em><strong># </strong>Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2019-20, released on 30 August, 2019, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2019-20.pdf" title="/upload/files/PRESS_NOTE-Q1_2019-20.pdf">click here</a> to access&nbsp;</em></p><p style="text-align:justify"><em><strong>Note: </strong>Kindly <a href="https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423" title="https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423">click here</a> to access the data in a spreadsheet</em><br /><strong>---</strong></p><p style="text-align:justify">Growth in the real GDP is vital because it provides the government with additional revenue to spend. When the economy expands, it signifies that the economic activities are reaching the level as they existed during the normal times i.e., before the pandemic had struck. With the return of the economy to normalcy, employment generation is expected to take place. Employment creation can lead to a resurgence in effective demand i.e., purchasing power.</p><p style="text-align:justify"><strong>Measuring real GDP growth after 2 years of the pandemic</strong></p><p style="text-align:justify">The GDP at constant prices expanded by <a href="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022.pdf" title="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022.pdf">4.1 percent in the last quarter (Q4)</a> of 2021-22. While the real economy grew y-o-y by 13.51 percent in the Q1 as compared to a y-o-y real GDP growth of 20.08 percent in the corresponding period last year, a different picture emerges when the base is shifted to Q1 GDP in the pre-covid times. As compared to the 3-year average of the Q1 GDP pertaining to 2017-18, 2018-19, and 2019-20, the real GDP in the first quarter of the current fiscal expanded by 9.58 percent i.e., less than the y-o-y growth of 13.51 percent. Please take a&nbsp;look at table-1.&nbsp;</p><p style="text-align:justify"><strong>Table 1: Quarterly Estimates of Expenditure Components of GDP for Q1 (April-June) at 2011-12 Prices, various years (in Rs. Crore)</strong></p><p style="text-align:justify"><img alt="" src="/upload/images/Table%201%20Quarterly%20Estimates%20of%20Expenditure%20Components%20of%20GDP%20for%20Q1%20at%202011-12%20Prices%20in%20Rs.%20Crore.png" style="height:309px; width:874px" /></p><p style="text-align:justify"><em><strong>Source: </strong>Same as chart-1<br /><strong>Note: </strong>Kindly <a href="https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423" title="https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423">click here</a> to access the data in a spreadsheet</em><br /><strong>---</strong></p><p style="text-align:justify">As compared to the 3-year average of the GDP during the first quarter of 2017-18, 2018-19 and 2019-20, the real GDP in the corresponding period last year contracted by 3.46 percent. As opposed to that, the y-o-y GDP expansion was to the tune of 20.08 percent in Q1 of 2021-22. Thus, the real GDP growth changes with the change in base and also the base year.</p><p style="text-align:justify"><strong>All the high frequency indicators aren&rsquo;t moving in the same direction</strong></p><p style="text-align:justify">After the completion of the first quarter of the current fiscal, the Ministry of Statistics and Programme Implementation (MoSPI) has provided the first estimate of the Q1&rsquo;s GDP. On the basis of about <a href="/upload/files/High%20frequency%20indicators.png" title="/upload/files/High%20frequency%20indicators.png">20 high frequency indicators</a>, the sector-wise estimates have been compiled by the ministry. Out of the 20 indicators, in the case of &#39;total telephone subscribers&#39; <em>(-2.5 percent)</em>, &#39;cargo handled at airports&#39; <em>(-1.7 percent)</em>, and &#39;Index of Industrial Production (IIP) pertaining to metallic minerals&#39; <em>(-6.5 percent)</em>, there has been y-o-y contractions in Q1 of 2022-23 as opposed to positive growths in the corresponding period last year. &nbsp;</p><p style="text-align:justify">In the case of certain high frequency indicators like &#39;production of cement&#39;, &#39;consumption of steel&#39;, &#39;sales of commercial vehicles&#39;, &#39;purchase of private vehicles&#39;, &#39;cargo handled at major sea ports&#39;, &#39;passengers handled at airports&#39;, &#39;IIP pertaining to mining and manufacturing&#39;, &#39;net tonne kilometer - railways&#39;, etc., the y-o-y percentage growth has reduced between Q1 of 2021-22 and Q1 of 2022-23.</p><p style="text-align:justify"><strong>Two-wheeler sale to the average Indian citizen still down</strong></p><p style="text-align:justify">Some economists tend to use the data on two-wheeler sale, which is provided by the industry body <a href="https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/" title="https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/">Society of Indian Automobile Manufacturers (SIAM)</a>. However, the SIAM data is related to the number of units which is <a href="https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/" title="https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/">sold by the manufacturers to dealers</a> across the country. During economic slowdown, dealers may be unable to sell the products they purchase from manufacturers, which could lead to building up of inventory with the former. Hence, the SIAM data may not capture the real situation i.e., the number of two-wheelers bought by the final consumers.&nbsp;</p><p style="text-align:justify"><img alt="" src="/upload/images/Chart%202%20Two%20wheeler%20vehicles%20registered%20in%20Q1%20of%20various%20years.png" style="height:555px; width:780px" /></p><p style="text-align:justify"><em><strong>Source: </strong>Vahan registration website,&nbsp;Ministry of Road Transport and Highways,&nbsp;please <a href="https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml" title="https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml">click here</a> to access&nbsp;<br /><strong>Note: </strong>Kindly <a href="https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423" title="https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423">click here</a> to access the data in a spreadsheet</em><br /><strong>---</strong></p><p style="text-align:justify">Instead of using SIAM data on two-wheeler sale, the data&nbsp;that is provided by <a href="https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml" title="https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml">Vahan dashboard</a> on vehicle registration, is used in the present piece. As compared to the 3-year average of the number of two-wheelers <em>(sum of non-transport and transport-two-wheelers) </em>registered during April-June of 2017, 2018 and 2019, the number of two-wheeler vehicles registered in the first quarters of 2020, 2021 and 2022 has been lower. In short, if the number of two-wheelers registered is used for analysis, then it shows that the purchasing power of the average Indian consumer has still not reached the pre-pandemic level.&nbsp;Please have a look at chart-2.&nbsp;</p><p style="text-align:justify"><strong>Whatever happened to consumer demand?</strong></p><p style="text-align:justify">The Private Final Consumption Expenditure (PFCE) <a href="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF" title="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">represents the value of goods and services</a> <a href="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF" title="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">consumed by the households</a> and <a href="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF" title="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">the private non-profit institutions</a> <a href="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF" title="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">serving households (NPISHs)</a> in the period extending from the beginning of April of one calendar year to the end of March of the next. In 2021-22 <em>(provisional estimates)</em>, PFCE&nbsp;i.e., final consumer spending <em>(at 2011-12 prices) </em>as a proportion of GDP <em>(at 2011-12 prices) </em>was 56.85 percent. Therefore, the revival of consumer demand is essential for boosting economic growth. The y-o-y growth rates of PFCE <em>(at constant prices) </em>were 8.88 percent in 2017-18, 6.61 percent in 2018-19, and 4.45 percent in 2019-20 <em>(2nd revised estimates)</em>. However, the y-o-y growth rates of PFCE <em>(at constant price)</em> dipped to -6.0 percent in 2020-21 <em>(1st RE)</em> but bounced back to 7.91 percent in 2021-22 <em>(PE)</em>. Please see table-2.</p><p style="text-align:justify"><strong>Table 2: Provisional Estimates of National Income and Expenditure Components of GDP, various years (at 2011- 12 Prices)</strong></p><p style="text-align:justify"><img alt="" src="/upload/images/Table%202%20Provisional%20Estimates%20of%20National%20Income%20and%20Expenditure%20Components%20of%20GDP%20various%20years%20at%202011-12%20Prices.png" style="height:523px; width:1050px" /></p><p style="text-align:justify"><em><strong>Source:</strong> <strong>**</strong> Press Note on Provisional Estimates of Annual National Income 2021-22 and Quarterly Estimates of Gross Domestic Product for the Fourth Quarter (Q4) of 2021-22, released on 31 May 2022, MoSPI, please <a href="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf" title="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf">click here</a> to access &nbsp;</em></p><p style="text-align:justify"><em><strong>#</strong> Press Note on First Advance Estimates of National Income 2020-21, released on 7 January, 2021, MoSPI, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf" title="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf">click here</a> to access &nbsp;</em></p><p style="text-align:justify"><em><strong>## </strong>Press Note on First Advance Estimates of National Income 2019-20, released on 7 January, 2020, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf" title="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf">click here</a> to access &nbsp;</em></p><p style="text-align:justify"><em><strong>#* </strong>Press Note on First Advance Estimates of National Income 2018-19, released on 7 January, 2019, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf" title="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf">click here</a> to access &nbsp;</em></p><p style="text-align:justify"><em><strong>^* </strong>Press Note on First Advance Estimates of National Income 2017-18, released on 5 January, 2018, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf" title="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf">click here</a> to access &nbsp;</em></p><p style="text-align:justify"><em><strong>^^ </strong>Press Note on Provisional Estimates of National Income 2016-17, released on 31 May, 2017, please <a href="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf" title="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf">click here</a> to access&nbsp;</em></p><p style="text-align:justify"><em><strong>Note: </strong>Kindly <a href="https://docs.google.com/spreadsheets/d/1aiEDfCYkTynV-ucq46fwJKffZosApMMk/edit?usp=sharing&amp;ouid=112233925171588304692&amp;rtpof=true&amp;sd=true" title="https://docs.google.com/spreadsheets/d/1aiEDfCYkTynV-ucq46fwJKffZosApMMk/edit?usp=sharing&amp;ouid=112233925171588304692&amp;rtpof=true&amp;sd=true">click here</a> to access the data in a spreadsheet</em><br /><strong>---</strong></p><p style="text-align:justify">As compared to the 3-year average of the PFCE <em>(at constant prices)</em> pertaining to 2017-18, 2018-19, and 2019-20 <em>(2nd RE)</em>, the real PFCE in 2020-21 <em>(1st RE)</em> and 2021-22 <em>(PE)</em> grew by -1.25 percent and 6.56 percent, respectively. The advance estimates of GDP <em>(at 2011-12 prices) </em>for 2022-23 would be released in January next year. Till then, we will have to wait for commenting further about the sustained growth of consumer demand. <a href="https://www.mse.ac.in/wp-content/uploads/2020/02/Ind-exp.-dec-13-Mind-the-statistics-gap.pdf" title="https://www.mse.ac.in/wp-content/uploads/2020/02/Ind-exp.-dec-13-Mind-the-statistics-gap.pdf">Experts have suggested</a> that in order to gauge consumer demand and income poverty, consumption expenditure survey of households by the National Statistical Office (NSO) needs to be done and the results are required to be published along with the release of&nbsp;unit-level data. It is worth noting that the <a href="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF" title="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">gap between the National Accounts Statistics (NAS)</a> <a href="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF" title="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">estimates of PFCE</a> and the <a href="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF" title="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">National Sample Survey (NSS)</a> <a href="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF" title="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">estimates of household consumption expenditure</a>&nbsp;<em>(aggregated at the national level)</em> has grown progressively over the years.&nbsp;</p><p style="text-align:justify"><strong>An alternative perspective</strong></p><p style="text-align:justify">As said earlier, the y-o-y growth of GDP at constant prices during Q1 of 2022-23 was <a href="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf" title="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf">13.5 percent</a>, whereas the y-o-y growth of GDP at current prices during the same period was <a href="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf" title="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf">26.7 percent</a>. It means that the GDP deflator grew y-o-y by 13.2 percent.&nbsp;</p><p style="text-align:justify">Likewise, the y-o-y growth of real Gross Value Added (GVA) at basic prices during Q1 of 2022-23 was <a href="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf" title="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf">12.7 percent</a>, whereas the y-o-y growth of GVA at basic prices at current prices during the same period was <a href="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf" title="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf">26.5 percent</a>. So, the GVA deflator grew y-o-y by 13.8 percent.&nbsp;</p><p style="text-align:justify">In order to arrive at GDP at constant prices from GDP at current prices, one needs a deflator. In the case of <a href="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html" title="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html">single deflation method</a>, a common price deflator is utilised to adjust both input and output prices. For <a href="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html" title="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html">double deflation method</a>, one needs two different deflators for adjusting input and output prices. In India, double deflation is done for agriculture, and mining and quarrying, whereas single deflation is used for other sectors. Thus, in <a href="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html" title="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html">our country, a mix</a> of single and double deflation methods is used. &nbsp;&nbsp;</p><p style="text-align:justify">A <a href="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html" title="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html">recent analysis</a> by Pragya Srivastava, published in Livemint.com, tells us that the GDP deflator on an average reflects 70 percent of the Wholesale Price Index (WPI) and 30 percent of the Consumer Price Index (CPI). As per HSBC Global Research, input prices <em>(reflected by WPI rise) </em>in the Q1 of 2022-23 have grown faster than the output prices <em>(indicated by the CPI increase)</em>, possibly leading to an underestimation of GVA growth, and therefore GDP growth. Remember, <a href="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf" title="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf">GDP at market prices</a> is derived as the <a href="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf" title="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf">sum of the GVA at basic prices</a>, <a href="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf" title="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf">plus all taxes on products</a>, <a href="https://pib.gov.in/PressReleasePage.aspx?PRID=1723153" title="https://pib.gov.in/PressReleasePage.aspx?PRID=1723153">less all subsidies on products</a>. In the case of single deflation method, if input <em>(indicated by WPI) </em>and output <em>(reflected by CPI)</em> prices expand at different rates, then it may cause overestimation or underestimation of economic performance.</p><p style="text-align:justify">A technical discussion by Jyoti Sharma <em>(please click <a href="https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html" title="https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html">here</a> and <a href="https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html" title="https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html">here</a> to access)</em> informs us that ideally, the GDP deflator of the MoSPI lies in the range {min. (CPI, WPI), max. (CPI, WPI)} i.e., the deflator must fall in the range defined by minimum of CPI and WPI and maximum of CPI and WPI for a sector. She proposes that in the case of double deflation method, CPI as a deflator for output value, and WPI for input value should be used. Instead of going for mix method, which India uses, one should go for either single or double deflation method across the sectors and sub-sectors in order to compare the trends across sectors.</p><p style="text-align:justify"><strong><em>References:&nbsp;</em></strong></p><p style="text-align:justify">Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2022-23, released on 31 August, 2022, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2022-23.pdf" title="/upload/files/PRESS_NOTE-Q1_2022-23.pdf">click here</a> to access&nbsp;</p><p style="text-align:justify">Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2021-22, released on 31 August, 2021, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2021-22.pdf" title="/upload/files/PRESS_NOTE-Q1_2021-22.pdf">click here</a> to access &nbsp;</p><p style="text-align:justify">Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2020-21, released on 31 August, 2020, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf" title="/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf">click here</a> to access&nbsp;</p><p style="text-align:justify">Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2019-20, released on 30 August, 2019, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2019-20.pdf" title="/upload/files/PRESS_NOTE-Q1_2019-20.pdf">click here</a> to access&nbsp;</p><p style="text-align:justify">Vahan registration website,&nbsp;Ministry of Road Transport and Highways,&nbsp;please <a href="https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml" title="https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml">click here</a> to access&nbsp;</p><p style="text-align:justify">Press Note on Provisional Estimates of Annual National Income 2021-22 and Quarterly Estimates of Gross Domestic Product for the Fourth Quarter (Q4) of 2021-22, released on 31 May 2022, MoSPI, please <a href="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf" title="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf">click here</a> to access &nbsp;</p><p style="text-align:justify">Press Note on First Advance Estimates of National Income 2020-21, released on 7 January, 2021, MoSPI, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf" title="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf">click here</a> to access &nbsp;</p><p style="text-align:justify">Press Note on First Advance Estimates of National Income 2019-20, released on 7 January, 2020, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf" title="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf">click here</a> to access &nbsp;</p><p style="text-align:justify">Press Note on First Advance Estimates of National Income 2018-19, released on 7 January, 2019, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf" title="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf">click here</a> to access &nbsp;</p><p style="text-align:justify">Press Note on First Advance Estimates of National Income 2017-18, released on 5 January, 2018, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf" title="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf">click here</a> to access &nbsp;</p><p style="text-align:justify">Press Note on Provisional Estimates of National Income 2016-17, released on 31 May, 2017, please <a href="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf" title="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf">click here</a> to access&nbsp;</p><p style="text-align:justify">Press release: Provisional estimates of Annual National Income, 2020-21 and Quarterly estimates (Q4) of Gross Domestic Product, 2020-21, Ministry of Statistics &amp; Programme Implementation, Press Information Bureau, released on 31 May, 2021, please click <a href="https://pib.gov.in/PressReleasePage.aspx?PRID=1723153" title="https://pib.gov.in/PressReleasePage.aspx?PRID=1723153">here</a> and <a href="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf" title="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf">here</a> to access &nbsp;&nbsp;</p><p style="text-align:justify">Estimates of Food Consumption Expenditure from Household Surveys and National Accounts -AC Kulshreshtha and Aloke Kar, Central Statistical Organisation (CSO), please <a href="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF" title="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">click here</a> to access&nbsp;</p><p style="text-align:justify">Is the GDP number an underestimate? -Pragya Srivastava, Livemint.com, 2 September, 2022, please <a href="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html" title="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html">click here</a> to access</p><p style="text-align:justify">The Real Story Behind India&rsquo;s Two Wheeler Sales or Rather the Lack of It -Vivek Kaul, 19 November, 2020, please <a href="https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/" title="https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/">click here</a> to access&nbsp;</p><p style="text-align:justify">Mind the statistics gap -C Rangarajan and S Mahendra Dev, The Indian Express, 13 December, 2019, please <a href="https://bit.ly/3Dsq9y2" title="https://bit.ly/3Dsq9y2">click here</a> to access&nbsp;</p><p style="text-align:justify">India&rsquo;s GDP: Deflating the right way -Jyoti Sharma, Ideas for India, 12 October, 2017, please <a href="https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html" title="https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html">click here</a> to access</p><p style="text-align:justify">India&rsquo;s GDP: Deflating the right way -Jyoti Sharma, Livemint.com, 12 October, 2017, please <a href="https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html" title="https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html">click here</a> to access</p><p style="text-align:justify">&nbsp;</p><p style="text-align:justify"><strong>Image Courtesy: Inclusive Media for Change/ Shambhu Ghatak</strong></p>',
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	'id' => (int) 63693,
	'title' => 'Realistic analysis shows that the Indian economy has simply taken little steps in Q1 instead of a quantum leap',
	'subheading' => null,
	'description' => '<p style="text-align:justify">There is euphoria abound about India&#39;s growth performance during the first quarter of the current fiscal. As compared to the corresponding period last year, the year-on-year (y-o-y) GDP growth in the first quarter (Q1) of 2022-23 is down. However, one should take into account the fact that the high growth performance of the real GDP in Q1 of 2021-22 was due to the low base in the corresponding period of the first pandemic year. The optimism surrounding y-o-y&nbsp;real GDP growth in the first quarter this year therefore appears to be natural.&nbsp;</p>

<p style="text-align:justify">On further delving into the data, it can be discovered that after two years of the pandemic, the GDP in the Q1 of the current fiscal, crossed the GDP figure corresponding to the Q1 of 2019-20. Please see chart-1.&nbsp;</p>

<p style="text-align:justify"><img alt="" src="/upload/images/Chart%201%20Quarterly%20Estimates%20of%20Expenditure%20Components%20of%20GDP%20for%20Q1%20at%202011-12%20Prices%20in%20Rs.%20Crore%281%29.png" style="height:687px; width:997px" /></p>

<p style="text-align:justify"><em><strong>Source: **</strong> Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2022-23, released on 31 August, 2022, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2022-23.pdf">click here</a> to access&nbsp;</em></p>

<p style="text-align:justify"><em><strong>*</strong> Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2021-22, released on 31 August, 2021, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2021-22.pdf">click here</a> to access &nbsp;</em></p>

<p style="text-align:justify"><em><strong>##</strong> Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2020-21, released on 31 August, 2020, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf">click here</a> to access&nbsp;</em></p>

<p style="text-align:justify"><em><strong># </strong>Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2019-20, released on 30 August, 2019, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2019-20.pdf">click here</a> to access&nbsp;</em></p>

<p style="text-align:justify"><em><strong>Note: </strong>Kindly <a href="https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423">click here</a> to access the data in a spreadsheet</em><br />
<strong>---</strong></p>

<p style="text-align:justify">Growth in the real GDP is vital because it provides the government with additional revenue to spend. When the economy expands, it signifies that the economic activities are reaching the level as they existed during the normal times i.e., before the pandemic had struck. With the return of the economy to normalcy, employment generation is expected to take place. Employment creation can lead to a resurgence in effective demand i.e., purchasing power.</p>

<p style="text-align:justify"><strong>Measuring real GDP growth after 2 years of the pandemic</strong></p>

<p style="text-align:justify">The GDP at constant prices expanded by <a href="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022.pdf">4.1 percent in the last quarter (Q4)</a> of 2021-22. While the real economy grew y-o-y by 13.51 percent in the Q1 as compared to a y-o-y real GDP growth of 20.08 percent in the corresponding period last year, a different picture emerges when the base is shifted to Q1 GDP in the pre-covid times. As compared to the 3-year average of the Q1 GDP pertaining to 2017-18, 2018-19, and 2019-20, the real GDP in the first quarter of the current fiscal expanded by 9.58 percent i.e., less than the y-o-y growth of 13.51 percent. Please take a&nbsp;look at table-1.&nbsp;</p>

<p style="text-align:justify"><strong>Table 1: Quarterly Estimates of Expenditure Components of GDP for Q1 (April-June) at 2011-12 Prices, various years (in Rs. Crore)</strong></p>

<p style="text-align:justify"><img alt="" src="/upload/images/Table%201%20Quarterly%20Estimates%20of%20Expenditure%20Components%20of%20GDP%20for%20Q1%20at%202011-12%20Prices%20in%20Rs.%20Crore.png" style="height:309px; width:874px" /></p>

<p style="text-align:justify"><em><strong>Source: </strong>Same as chart-1<br />
<strong>Note: </strong>Kindly <a href="https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423">click here</a> to access the data in a spreadsheet</em><br />
<strong>---</strong></p>

<p style="text-align:justify">As compared to the 3-year average of the GDP during the first quarter of 2017-18, 2018-19 and 2019-20, the real GDP in the corresponding period last year contracted by 3.46 percent. As opposed to that, the y-o-y GDP expansion was to the tune of 20.08 percent in Q1 of 2021-22. Thus, the real GDP growth changes with the change in base and also the base year.</p>

<p style="text-align:justify"><strong>All the high frequency indicators aren&rsquo;t moving in the same direction</strong></p>

<p style="text-align:justify">After the completion of the first quarter of the current fiscal, the Ministry of Statistics and Programme Implementation (MoSPI) has provided the first estimate of the Q1&rsquo;s GDP. On the basis of about <a href="/upload/files/High%20frequency%20indicators.png">20 high frequency indicators</a>, the sector-wise estimates have been compiled by the ministry. Out of the 20 indicators, in the case of &#39;total telephone subscribers&#39; <em>(-2.5 percent)</em>, &#39;cargo handled at airports&#39; <em>(-1.7 percent)</em>, and &#39;Index of Industrial Production (IIP) pertaining to metallic minerals&#39; <em>(-6.5 percent)</em>, there has been y-o-y contractions in Q1 of 2022-23 as opposed to positive growths in the corresponding period last year. &nbsp;</p>

<p style="text-align:justify">In the case of certain high frequency indicators like &#39;production of cement&#39;, &#39;consumption of steel&#39;, &#39;sales of commercial vehicles&#39;, &#39;purchase of private vehicles&#39;, &#39;cargo handled at major sea ports&#39;, &#39;passengers handled at airports&#39;, &#39;IIP pertaining to mining and manufacturing&#39;, &#39;net tonne kilometer - railways&#39;, etc., the y-o-y percentage growth has reduced between Q1 of 2021-22 and Q1 of 2022-23.</p>

<p style="text-align:justify"><strong>Two-wheeler sale to the average Indian citizen still down</strong></p>

<p style="text-align:justify">Some economists tend to use the data on two-wheeler sale, which is provided by the industry body <a href="https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/">Society of Indian Automobile Manufacturers (SIAM)</a>. However, the SIAM data is related to the number of units which is <a href="https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/">sold by the manufacturers to dealers</a> across the country. During economic slowdown, dealers may be unable to sell the products they purchase from manufacturers, which could lead to building up of inventory with the former. Hence, the SIAM data may not capture the real situation i.e., the number of two-wheelers bought by the final consumers.&nbsp;</p>

<p style="text-align:justify"><img alt="" src="/upload/images/Chart%202%20Two%20wheeler%20vehicles%20registered%20in%20Q1%20of%20various%20years.png" style="height:555px; width:780px" /></p>

<p style="text-align:justify"><em><strong>Source: </strong>Vahan registration website,&nbsp;Ministry of Road Transport and Highways,&nbsp;please <a href="https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml">click here</a> to access&nbsp;<br />
<strong>Note: </strong>Kindly <a href="https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423">click here</a> to access the data in a spreadsheet</em><br />
<strong>---</strong></p>

<p style="text-align:justify">Instead of using SIAM data on two-wheeler sale, the data&nbsp;that is provided by <a href="https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml">Vahan dashboard</a> on vehicle registration, is used in the present piece. As compared to the 3-year average of the number of two-wheelers <em>(sum of non-transport and transport-two-wheelers) </em>registered during April-June of 2017, 2018 and 2019, the number of two-wheeler vehicles registered in the first quarters of 2020, 2021 and 2022 has been lower. In short, if the number of two-wheelers registered is used for analysis, then it shows that the purchasing power of the average Indian consumer has still not reached the pre-pandemic level.&nbsp;Please have a look at chart-2.&nbsp;</p>

<p style="text-align:justify"><strong>Whatever happened to consumer demand?</strong></p>

<p style="text-align:justify">The Private Final Consumption Expenditure (PFCE) <a href="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">represents the value of goods and services</a> <a href="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">consumed by the households</a> and <a href="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">the private non-profit institutions</a> <a href="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">serving households (NPISHs)</a> in the period extending from the beginning of April of one calendar year to the end of March of the next. In 2021-22 <em>(provisional estimates)</em>, PFCE&nbsp;i.e., final consumer spending <em>(at 2011-12 prices) </em>as a proportion of GDP <em>(at 2011-12 prices) </em>was 56.85 percent. Therefore, the revival of consumer demand is essential for boosting economic growth. The y-o-y growth rates of PFCE <em>(at constant prices) </em>were 8.88 percent in 2017-18, 6.61 percent in 2018-19, and 4.45 percent in 2019-20 <em>(2nd revised estimates)</em>. However, the y-o-y growth rates of PFCE <em>(at constant price)</em> dipped to -6.0 percent in 2020-21 <em>(1st RE)</em> but bounced back to 7.91 percent in 2021-22 <em>(PE)</em>. Please see table-2.</p>

<p style="text-align:justify"><strong>Table 2: Provisional Estimates of National Income and Expenditure Components of GDP, various years (at 2011- 12 Prices)</strong></p>

<p style="text-align:justify"><img alt="" src="/upload/images/Table%202%20Provisional%20Estimates%20of%20National%20Income%20and%20Expenditure%20Components%20of%20GDP%20various%20years%20at%202011-12%20Prices.png" style="height:523px; width:1050px" /></p>

<p style="text-align:justify"><em><strong>Source:</strong> <strong>**</strong> Press Note on Provisional Estimates of Annual National Income 2021-22 and Quarterly Estimates of Gross Domestic Product for the Fourth Quarter (Q4) of 2021-22, released on 31 May 2022, MoSPI, please <a href="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf">click here</a> to access &nbsp;</em></p>

<p style="text-align:justify"><em><strong>#</strong> Press Note on First Advance Estimates of National Income 2020-21, released on 7 January, 2021, MoSPI, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf">click here</a> to access &nbsp;</em></p>

<p style="text-align:justify"><em><strong>## </strong>Press Note on First Advance Estimates of National Income 2019-20, released on 7 January, 2020, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf">click here</a> to access &nbsp;</em></p>

<p style="text-align:justify"><em><strong>#* </strong>Press Note on First Advance Estimates of National Income 2018-19, released on 7 January, 2019, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf">click here</a> to access &nbsp;</em></p>

<p style="text-align:justify"><em><strong>^* </strong>Press Note on First Advance Estimates of National Income 2017-18, released on 5 January, 2018, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf">click here</a> to access &nbsp;</em></p>

<p style="text-align:justify"><em><strong>^^ </strong>Press Note on Provisional Estimates of National Income 2016-17, released on 31 May, 2017, please <a href="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf">click here</a> to access&nbsp;</em></p>

<p style="text-align:justify"><em><strong>Note: </strong>Kindly <a href="https://docs.google.com/spreadsheets/d/1aiEDfCYkTynV-ucq46fwJKffZosApMMk/edit?usp=sharing&amp;ouid=112233925171588304692&amp;rtpof=true&amp;sd=true">click here</a> to access the data in a spreadsheet</em><br />
<strong>---</strong></p>

<p style="text-align:justify">As compared to the 3-year average of the PFCE <em>(at constant prices)</em> pertaining to 2017-18, 2018-19, and 2019-20 <em>(2nd RE)</em>, the real PFCE in 2020-21 <em>(1st RE)</em> and 2021-22 <em>(PE)</em> grew by -1.25 percent and 6.56 percent, respectively. The advance estimates of GDP <em>(at 2011-12 prices) </em>for 2022-23 would be released in January next year. Till then, we will have to wait for commenting further about the sustained growth of consumer demand. <a href="https://www.mse.ac.in/wp-content/uploads/2020/02/Ind-exp.-dec-13-Mind-the-statistics-gap.pdf">Experts have suggested</a> that in order to gauge consumer demand and income poverty, consumption expenditure survey of households by the National Statistical Office (NSO) needs to be done and the results are required to be published along with the release of&nbsp;unit-level data. It is worth noting that the <a href="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">gap between the National Accounts Statistics (NAS)</a> <a href="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">estimates of PFCE</a> and the <a href="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">National Sample Survey (NSS)</a> <a href="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">estimates of household consumption expenditure</a>&nbsp;<em>(aggregated at the national level)</em> has grown progressively over the years.&nbsp;</p>

<p style="text-align:justify"><strong>An alternative perspective</strong></p>

<p style="text-align:justify">As said earlier, the y-o-y growth of GDP at constant prices during Q1 of 2022-23 was <a href="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf">13.5 percent</a>, whereas the y-o-y growth of GDP at current prices during the same period was <a href="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf">26.7 percent</a>. It means that the GDP deflator grew y-o-y by 13.2 percent.&nbsp;</p>

<p style="text-align:justify">Likewise, the y-o-y growth of real Gross Value Added (GVA) at basic prices during Q1 of 2022-23 was <a href="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf">12.7 percent</a>, whereas the y-o-y growth of GVA at basic prices at current prices during the same period was <a href="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf">26.5 percent</a>. So, the GVA deflator grew y-o-y by 13.8 percent.&nbsp;</p>

<p style="text-align:justify">In order to arrive at GDP at constant prices from GDP at current prices, one needs a deflator. In the case of <a href="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html">single deflation method</a>, a common price deflator is utilised to adjust both input and output prices. For <a href="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html">double deflation method</a>, one needs two different deflators for adjusting input and output prices. In India, double deflation is done for agriculture, and mining and quarrying, whereas single deflation is used for other sectors. Thus, in <a href="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html">our country, a mix</a> of single and double deflation methods is used. &nbsp;&nbsp;</p>

<p style="text-align:justify">A <a href="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html">recent analysis</a> by Pragya Srivastava, published in Livemint.com, tells us that the GDP deflator on an average reflects 70 percent of the Wholesale Price Index (WPI) and 30 percent of the Consumer Price Index (CPI). As per HSBC Global Research, input prices <em>(reflected by WPI rise) </em>in the Q1 of 2022-23 have grown faster than the output prices <em>(indicated by the CPI increase)</em>, possibly leading to an underestimation of GVA growth, and therefore GDP growth. Remember, <a href="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf">GDP at market prices</a> is derived as the <a href="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf">sum of the GVA at basic prices</a>, <a href="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf">plus all taxes on products</a>, <a href="https://pib.gov.in/PressReleasePage.aspx?PRID=1723153">less all subsidies on products</a>. In the case of single deflation method, if input <em>(indicated by WPI) </em>and output <em>(reflected by CPI)</em> prices expand at different rates, then it may cause overestimation or underestimation of economic performance.</p>

<p style="text-align:justify">A technical discussion by Jyoti Sharma <em>(please click <a href="https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html">here</a> and <a href="https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html">here</a> to access)</em> informs us that ideally, the GDP deflator of the MoSPI lies in the range {min. (CPI, WPI), max. (CPI, WPI)} i.e., the deflator must fall in the range defined by minimum of CPI and WPI and maximum of CPI and WPI for a sector. She proposes that in the case of double deflation method, CPI as a deflator for output value, and WPI for input value should be used. Instead of going for mix method, which India uses, one should go for either single or double deflation method across the sectors and sub-sectors in order to compare the trends across sectors.</p>

<p style="text-align:justify"><strong><em>References:&nbsp;</em></strong></p>

<p style="text-align:justify">Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2022-23, released on 31 August, 2022, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2022-23.pdf">click here</a> to access&nbsp;</p>

<p style="text-align:justify">Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2021-22, released on 31 August, 2021, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2021-22.pdf">click here</a> to access &nbsp;</p>

<p style="text-align:justify">Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2020-21, released on 31 August, 2020, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf">click here</a> to access&nbsp;</p>

<p style="text-align:justify">Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2019-20, released on 30 August, 2019, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2019-20.pdf">click here</a> to access&nbsp;</p>

<p style="text-align:justify">Vahan registration website,&nbsp;Ministry of Road Transport and Highways,&nbsp;please <a href="https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml">click here</a> to access&nbsp;</p>

<p style="text-align:justify">Press Note on Provisional Estimates of Annual National Income 2021-22 and Quarterly Estimates of Gross Domestic Product for the Fourth Quarter (Q4) of 2021-22, released on 31 May 2022, MoSPI, please <a href="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf">click here</a> to access &nbsp;</p>

<p style="text-align:justify">Press Note on First Advance Estimates of National Income 2020-21, released on 7 January, 2021, MoSPI, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf">click here</a> to access &nbsp;</p>

<p style="text-align:justify">Press Note on First Advance Estimates of National Income 2019-20, released on 7 January, 2020, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf">click here</a> to access &nbsp;</p>

<p style="text-align:justify">Press Note on First Advance Estimates of National Income 2018-19, released on 7 January, 2019, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf">click here</a> to access &nbsp;</p>

<p style="text-align:justify">Press Note on First Advance Estimates of National Income 2017-18, released on 5 January, 2018, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf">click here</a> to access &nbsp;</p>

<p style="text-align:justify">Press Note on Provisional Estimates of National Income 2016-17, released on 31 May, 2017, please <a href="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf">click here</a> to access&nbsp;</p>

<p style="text-align:justify">Press release: Provisional estimates of Annual National Income, 2020-21 and Quarterly estimates (Q4) of Gross Domestic Product, 2020-21, Ministry of Statistics &amp; Programme Implementation, Press Information Bureau, released on 31 May, 2021, please click <a href="https://pib.gov.in/PressReleasePage.aspx?PRID=1723153">here</a> and <a href="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf">here</a> to access &nbsp;&nbsp;</p>

<p style="text-align:justify">Estimates of Food Consumption Expenditure from Household Surveys and National Accounts -AC Kulshreshtha and Aloke Kar, Central Statistical Organisation (CSO), please <a href="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">click here</a> to access&nbsp;</p>

<p style="text-align:justify">Is the GDP number an underestimate? -Pragya Srivastava, Livemint.com, 2 September, 2022, please <a href="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html ">click here</a> to access</p>

<p style="text-align:justify">The Real Story Behind India&rsquo;s Two Wheeler Sales or Rather the Lack of It -Vivek Kaul, 19 November, 2020, please <a href="https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/">click here</a> to access&nbsp;</p>

<p style="text-align:justify">Mind the statistics gap -C Rangarajan and S Mahendra Dev, The Indian Express, 13 December, 2019, please <a href="https://bit.ly/3Dsq9y2">click here</a> to access&nbsp;</p>

<p style="text-align:justify">India&rsquo;s GDP: Deflating the right way -Jyoti Sharma, Ideas for India, 12 October, 2017, please <a href="https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html">click here</a> to access</p>

<p style="text-align:justify">India&rsquo;s GDP: Deflating the right way -Jyoti Sharma, Livemint.com, 12 October, 2017, please <a href="https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html ">click here</a> to access</p>

<p style="text-align:justify">&nbsp;</p>

<p style="text-align:justify"><strong>Image Courtesy: Inclusive Media for Change/ Shambhu Ghatak</strong></p>
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$articleid = (int) 63693
$metaTitle = 'NEWS ALERTS | Realistic analysis shows that the Indian economy has simply taken little steps in Q1 instead of a quantum leap'
$metaKeywords = 'Consumer Price Index,CPI,GDP at 2011-12 prices,GDP at constant prices,GDP at current prices,GDP deflation,Gross Value Added,GVA at basic prices,Real GDP growth,Wholesale Price Index,WPI'
$metaDesc = 'There is euphoria abound about India&#39;s growth performance during the first quarter of the current fiscal. As compared to the corresponding period last year, the year-on-year (y-o-y) GDP growth in the first quarter (Q1) of 2022-23 is down. However, one...'
$disp = '<p style="text-align:justify">There is euphoria abound about India&#39;s growth performance during the first quarter of the current fiscal. As compared to the corresponding period last year, the year-on-year (y-o-y) GDP growth in the first quarter (Q1) of 2022-23 is down. However, one should take into account the fact that the high growth performance of the real GDP in Q1 of 2021-22 was due to the low base in the corresponding period of the first pandemic year. The optimism surrounding y-o-y&nbsp;real GDP growth in the first quarter this year therefore appears to be natural.&nbsp;</p><p style="text-align:justify">On further delving into the data, it can be discovered that after two years of the pandemic, the GDP in the Q1 of the current fiscal, crossed the GDP figure corresponding to the Q1 of 2019-20. Please see chart-1.&nbsp;</p><p style="text-align:justify"><img alt="" src="/upload/images/Chart%201%20Quarterly%20Estimates%20of%20Expenditure%20Components%20of%20GDP%20for%20Q1%20at%202011-12%20Prices%20in%20Rs.%20Crore%281%29.png" style="height:687px; width:997px" /></p><p style="text-align:justify"><em><strong>Source: **</strong> Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2022-23, released on 31 August, 2022, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2022-23.pdf" title="/upload/files/PRESS_NOTE-Q1_2022-23.pdf">click here</a> to access&nbsp;</em></p><p style="text-align:justify"><em><strong>*</strong> Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2021-22, released on 31 August, 2021, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2021-22.pdf" title="/upload/files/PRESS_NOTE-Q1_2021-22.pdf">click here</a> to access &nbsp;</em></p><p style="text-align:justify"><em><strong>##</strong> Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2020-21, released on 31 August, 2020, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf" title="/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf">click here</a> to access&nbsp;</em></p><p style="text-align:justify"><em><strong># </strong>Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2019-20, released on 30 August, 2019, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2019-20.pdf" title="/upload/files/PRESS_NOTE-Q1_2019-20.pdf">click here</a> to access&nbsp;</em></p><p style="text-align:justify"><em><strong>Note: </strong>Kindly <a href="https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423" title="https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423">click here</a> to access the data in a spreadsheet</em><br /><strong>---</strong></p><p style="text-align:justify">Growth in the real GDP is vital because it provides the government with additional revenue to spend. When the economy expands, it signifies that the economic activities are reaching the level as they existed during the normal times i.e., before the pandemic had struck. With the return of the economy to normalcy, employment generation is expected to take place. Employment creation can lead to a resurgence in effective demand i.e., purchasing power.</p><p style="text-align:justify"><strong>Measuring real GDP growth after 2 years of the pandemic</strong></p><p style="text-align:justify">The GDP at constant prices expanded by <a href="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022.pdf" title="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022.pdf">4.1 percent in the last quarter (Q4)</a> of 2021-22. While the real economy grew y-o-y by 13.51 percent in the Q1 as compared to a y-o-y real GDP growth of 20.08 percent in the corresponding period last year, a different picture emerges when the base is shifted to Q1 GDP in the pre-covid times. As compared to the 3-year average of the Q1 GDP pertaining to 2017-18, 2018-19, and 2019-20, the real GDP in the first quarter of the current fiscal expanded by 9.58 percent i.e., less than the y-o-y growth of 13.51 percent. Please take a&nbsp;look at table-1.&nbsp;</p><p style="text-align:justify"><strong>Table 1: Quarterly Estimates of Expenditure Components of GDP for Q1 (April-June) at 2011-12 Prices, various years (in Rs. Crore)</strong></p><p style="text-align:justify"><img alt="" src="/upload/images/Table%201%20Quarterly%20Estimates%20of%20Expenditure%20Components%20of%20GDP%20for%20Q1%20at%202011-12%20Prices%20in%20Rs.%20Crore.png" style="height:309px; width:874px" /></p><p style="text-align:justify"><em><strong>Source: </strong>Same as chart-1<br /><strong>Note: </strong>Kindly <a href="https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423" title="https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423">click here</a> to access the data in a spreadsheet</em><br /><strong>---</strong></p><p style="text-align:justify">As compared to the 3-year average of the GDP during the first quarter of 2017-18, 2018-19 and 2019-20, the real GDP in the corresponding period last year contracted by 3.46 percent. As opposed to that, the y-o-y GDP expansion was to the tune of 20.08 percent in Q1 of 2021-22. Thus, the real GDP growth changes with the change in base and also the base year.</p><p style="text-align:justify"><strong>All the high frequency indicators aren&rsquo;t moving in the same direction</strong></p><p style="text-align:justify">After the completion of the first quarter of the current fiscal, the Ministry of Statistics and Programme Implementation (MoSPI) has provided the first estimate of the Q1&rsquo;s GDP. On the basis of about <a href="/upload/files/High%20frequency%20indicators.png" title="/upload/files/High%20frequency%20indicators.png">20 high frequency indicators</a>, the sector-wise estimates have been compiled by the ministry. Out of the 20 indicators, in the case of &#39;total telephone subscribers&#39; <em>(-2.5 percent)</em>, &#39;cargo handled at airports&#39; <em>(-1.7 percent)</em>, and &#39;Index of Industrial Production (IIP) pertaining to metallic minerals&#39; <em>(-6.5 percent)</em>, there has been y-o-y contractions in Q1 of 2022-23 as opposed to positive growths in the corresponding period last year. &nbsp;</p><p style="text-align:justify">In the case of certain high frequency indicators like &#39;production of cement&#39;, &#39;consumption of steel&#39;, &#39;sales of commercial vehicles&#39;, &#39;purchase of private vehicles&#39;, &#39;cargo handled at major sea ports&#39;, &#39;passengers handled at airports&#39;, &#39;IIP pertaining to mining and manufacturing&#39;, &#39;net tonne kilometer - railways&#39;, etc., the y-o-y percentage growth has reduced between Q1 of 2021-22 and Q1 of 2022-23.</p><p style="text-align:justify"><strong>Two-wheeler sale to the average Indian citizen still down</strong></p><p style="text-align:justify">Some economists tend to use the data on two-wheeler sale, which is provided by the industry body <a href="https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/" title="https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/">Society of Indian Automobile Manufacturers (SIAM)</a>. However, the SIAM data is related to the number of units which is <a href="https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/" title="https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/">sold by the manufacturers to dealers</a> across the country. During economic slowdown, dealers may be unable to sell the products they purchase from manufacturers, which could lead to building up of inventory with the former. Hence, the SIAM data may not capture the real situation i.e., the number of two-wheelers bought by the final consumers.&nbsp;</p><p style="text-align:justify"><img alt="" src="/upload/images/Chart%202%20Two%20wheeler%20vehicles%20registered%20in%20Q1%20of%20various%20years.png" style="height:555px; width:780px" /></p><p style="text-align:justify"><em><strong>Source: </strong>Vahan registration website,&nbsp;Ministry of Road Transport and Highways,&nbsp;please <a href="https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml" title="https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml">click here</a> to access&nbsp;<br /><strong>Note: </strong>Kindly <a href="https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423" title="https://docs.google.com/spreadsheets/d/1qtYf78Om3VVZyj4dBTBX40OqJlF9l3ne/edit#gid=1715168423">click here</a> to access the data in a spreadsheet</em><br /><strong>---</strong></p><p style="text-align:justify">Instead of using SIAM data on two-wheeler sale, the data&nbsp;that is provided by <a href="https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml" title="https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml">Vahan dashboard</a> on vehicle registration, is used in the present piece. As compared to the 3-year average of the number of two-wheelers <em>(sum of non-transport and transport-two-wheelers) </em>registered during April-June of 2017, 2018 and 2019, the number of two-wheeler vehicles registered in the first quarters of 2020, 2021 and 2022 has been lower. In short, if the number of two-wheelers registered is used for analysis, then it shows that the purchasing power of the average Indian consumer has still not reached the pre-pandemic level.&nbsp;Please have a look at chart-2.&nbsp;</p><p style="text-align:justify"><strong>Whatever happened to consumer demand?</strong></p><p style="text-align:justify">The Private Final Consumption Expenditure (PFCE) <a href="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF" title="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">represents the value of goods and services</a> <a href="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF" title="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">consumed by the households</a> and <a href="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF" title="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">the private non-profit institutions</a> <a href="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF" title="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">serving households (NPISHs)</a> in the period extending from the beginning of April of one calendar year to the end of March of the next. In 2021-22 <em>(provisional estimates)</em>, PFCE&nbsp;i.e., final consumer spending <em>(at 2011-12 prices) </em>as a proportion of GDP <em>(at 2011-12 prices) </em>was 56.85 percent. Therefore, the revival of consumer demand is essential for boosting economic growth. The y-o-y growth rates of PFCE <em>(at constant prices) </em>were 8.88 percent in 2017-18, 6.61 percent in 2018-19, and 4.45 percent in 2019-20 <em>(2nd revised estimates)</em>. However, the y-o-y growth rates of PFCE <em>(at constant price)</em> dipped to -6.0 percent in 2020-21 <em>(1st RE)</em> but bounced back to 7.91 percent in 2021-22 <em>(PE)</em>. Please see table-2.</p><p style="text-align:justify"><strong>Table 2: Provisional Estimates of National Income and Expenditure Components of GDP, various years (at 2011- 12 Prices)</strong></p><p style="text-align:justify"><img alt="" src="/upload/images/Table%202%20Provisional%20Estimates%20of%20National%20Income%20and%20Expenditure%20Components%20of%20GDP%20various%20years%20at%202011-12%20Prices.png" style="height:523px; width:1050px" /></p><p style="text-align:justify"><em><strong>Source:</strong> <strong>**</strong> Press Note on Provisional Estimates of Annual National Income 2021-22 and Quarterly Estimates of Gross Domestic Product for the Fourth Quarter (Q4) of 2021-22, released on 31 May 2022, MoSPI, please <a href="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf" title="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf">click here</a> to access &nbsp;</em></p><p style="text-align:justify"><em><strong>#</strong> Press Note on First Advance Estimates of National Income 2020-21, released on 7 January, 2021, MoSPI, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf" title="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf">click here</a> to access &nbsp;</em></p><p style="text-align:justify"><em><strong>## </strong>Press Note on First Advance Estimates of National Income 2019-20, released on 7 January, 2020, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf" title="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf">click here</a> to access &nbsp;</em></p><p style="text-align:justify"><em><strong>#* </strong>Press Note on First Advance Estimates of National Income 2018-19, released on 7 January, 2019, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf" title="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf">click here</a> to access &nbsp;</em></p><p style="text-align:justify"><em><strong>^* </strong>Press Note on First Advance Estimates of National Income 2017-18, released on 5 January, 2018, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf" title="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf">click here</a> to access &nbsp;</em></p><p style="text-align:justify"><em><strong>^^ </strong>Press Note on Provisional Estimates of National Income 2016-17, released on 31 May, 2017, please <a href="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf" title="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf">click here</a> to access&nbsp;</em></p><p style="text-align:justify"><em><strong>Note: </strong>Kindly <a href="https://docs.google.com/spreadsheets/d/1aiEDfCYkTynV-ucq46fwJKffZosApMMk/edit?usp=sharing&amp;ouid=112233925171588304692&amp;rtpof=true&amp;sd=true" title="https://docs.google.com/spreadsheets/d/1aiEDfCYkTynV-ucq46fwJKffZosApMMk/edit?usp=sharing&amp;ouid=112233925171588304692&amp;rtpof=true&amp;sd=true">click here</a> to access the data in a spreadsheet</em><br /><strong>---</strong></p><p style="text-align:justify">As compared to the 3-year average of the PFCE <em>(at constant prices)</em> pertaining to 2017-18, 2018-19, and 2019-20 <em>(2nd RE)</em>, the real PFCE in 2020-21 <em>(1st RE)</em> and 2021-22 <em>(PE)</em> grew by -1.25 percent and 6.56 percent, respectively. The advance estimates of GDP <em>(at 2011-12 prices) </em>for 2022-23 would be released in January next year. Till then, we will have to wait for commenting further about the sustained growth of consumer demand. <a href="https://www.mse.ac.in/wp-content/uploads/2020/02/Ind-exp.-dec-13-Mind-the-statistics-gap.pdf" title="https://www.mse.ac.in/wp-content/uploads/2020/02/Ind-exp.-dec-13-Mind-the-statistics-gap.pdf">Experts have suggested</a> that in order to gauge consumer demand and income poverty, consumption expenditure survey of households by the National Statistical Office (NSO) needs to be done and the results are required to be published along with the release of&nbsp;unit-level data. It is worth noting that the <a href="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF" title="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">gap between the National Accounts Statistics (NAS)</a> <a href="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF" title="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">estimates of PFCE</a> and the <a href="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF" title="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">National Sample Survey (NSS)</a> <a href="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF" title="/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">estimates of household consumption expenditure</a>&nbsp;<em>(aggregated at the national level)</em> has grown progressively over the years.&nbsp;</p><p style="text-align:justify"><strong>An alternative perspective</strong></p><p style="text-align:justify">As said earlier, the y-o-y growth of GDP at constant prices during Q1 of 2022-23 was <a href="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf" title="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf">13.5 percent</a>, whereas the y-o-y growth of GDP at current prices during the same period was <a href="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf" title="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf">26.7 percent</a>. It means that the GDP deflator grew y-o-y by 13.2 percent.&nbsp;</p><p style="text-align:justify">Likewise, the y-o-y growth of real Gross Value Added (GVA) at basic prices during Q1 of 2022-23 was <a href="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf" title="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf">12.7 percent</a>, whereas the y-o-y growth of GVA at basic prices at current prices during the same period was <a href="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf" title="https://im4change.org/upload/files/PRESS_NOTE-Q1_2022-23.pdf">26.5 percent</a>. So, the GVA deflator grew y-o-y by 13.8 percent.&nbsp;</p><p style="text-align:justify">In order to arrive at GDP at constant prices from GDP at current prices, one needs a deflator. In the case of <a href="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html" title="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html">single deflation method</a>, a common price deflator is utilised to adjust both input and output prices. For <a href="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html" title="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html">double deflation method</a>, one needs two different deflators for adjusting input and output prices. In India, double deflation is done for agriculture, and mining and quarrying, whereas single deflation is used for other sectors. Thus, in <a href="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html" title="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html">our country, a mix</a> of single and double deflation methods is used. &nbsp;&nbsp;</p><p style="text-align:justify">A <a href="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html" title="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html">recent analysis</a> by Pragya Srivastava, published in Livemint.com, tells us that the GDP deflator on an average reflects 70 percent of the Wholesale Price Index (WPI) and 30 percent of the Consumer Price Index (CPI). As per HSBC Global Research, input prices <em>(reflected by WPI rise) </em>in the Q1 of 2022-23 have grown faster than the output prices <em>(indicated by the CPI increase)</em>, possibly leading to an underestimation of GVA growth, and therefore GDP growth. Remember, <a href="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf" title="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf">GDP at market prices</a> is derived as the <a href="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf" title="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf">sum of the GVA at basic prices</a>, <a href="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf" title="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf">plus all taxes on products</a>, <a href="https://pib.gov.in/PressReleasePage.aspx?PRID=1723153" title="https://pib.gov.in/PressReleasePage.aspx?PRID=1723153">less all subsidies on products</a>. In the case of single deflation method, if input <em>(indicated by WPI) </em>and output <em>(reflected by CPI)</em> prices expand at different rates, then it may cause overestimation or underestimation of economic performance.</p><p style="text-align:justify">A technical discussion by Jyoti Sharma <em>(please click <a href="https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html" title="https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html">here</a> and <a href="https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html" title="https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html">here</a> to access)</em> informs us that ideally, the GDP deflator of the MoSPI lies in the range {min. (CPI, WPI), max. (CPI, WPI)} i.e., the deflator must fall in the range defined by minimum of CPI and WPI and maximum of CPI and WPI for a sector. She proposes that in the case of double deflation method, CPI as a deflator for output value, and WPI for input value should be used. Instead of going for mix method, which India uses, one should go for either single or double deflation method across the sectors and sub-sectors in order to compare the trends across sectors.</p><p style="text-align:justify"><strong><em>References:&nbsp;</em></strong></p><p style="text-align:justify">Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2022-23, released on 31 August, 2022, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2022-23.pdf" title="/upload/files/PRESS_NOTE-Q1_2022-23.pdf">click here</a> to access&nbsp;</p><p style="text-align:justify">Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2021-22, released on 31 August, 2021, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2021-22.pdf" title="/upload/files/PRESS_NOTE-Q1_2021-22.pdf">click here</a> to access &nbsp;</p><p style="text-align:justify">Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2020-21, released on 31 August, 2020, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf" title="/upload/files/PRESS_NOTE-Q1_2020-21%281%29.pdf">click here</a> to access&nbsp;</p><p style="text-align:justify">Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2019-20, released on 30 August, 2019, MoSPI, please <a href="/upload/files/PRESS_NOTE-Q1_2019-20.pdf" title="/upload/files/PRESS_NOTE-Q1_2019-20.pdf">click here</a> to access&nbsp;</p><p style="text-align:justify">Vahan registration website,&nbsp;Ministry of Road Transport and Highways,&nbsp;please <a href="https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml" title="https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml">click here</a> to access&nbsp;</p><p style="text-align:justify">Press Note on Provisional Estimates of Annual National Income 2021-22 and Quarterly Estimates of Gross Domestic Product for the Fourth Quarter (Q4) of 2021-22, released on 31 May 2022, MoSPI, please <a href="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf" title="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20Annual%20National%20Income%202021-22%20and%20Quarterly%20Estimates%20of%20Gross%20Domestic%20Product%20for%20the%20Q4%20of%202021-22%20released%20on%2031%20May%202022%281%29.pdf">click here</a> to access &nbsp;</p><p style="text-align:justify">Press Note on First Advance Estimates of National Income 2020-21, released on 7 January, 2021, MoSPI, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf" title="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202020-21%20CSO%20MoSPI.pdf">click here</a> to access &nbsp;</p><p style="text-align:justify">Press Note on First Advance Estimates of National Income 2019-20, released on 7 January, 2020, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf" title="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202019-20%20CSO%20MoSPI.pdf">click here</a> to access &nbsp;</p><p style="text-align:justify">Press Note on First Advance Estimates of National Income 2018-19, released on 7 January, 2019, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf" title="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202018-19.pdf">click here</a> to access &nbsp;</p><p style="text-align:justify">Press Note on First Advance Estimates of National Income 2017-18, released on 5 January, 2018, please <a href="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf" title="/upload/files/Press%20Note%20on%20First%20Advance%20Estimates%20of%20National%20Income%202017-18.pdf">click here</a> to access &nbsp;</p><p style="text-align:justify">Press Note on Provisional Estimates of National Income 2016-17, released on 31 May, 2017, please <a href="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf" title="/upload/files/Press%20Note%20on%20Provisional%20Estimates%20of%20National%20Income%202016-17.pdf">click here</a> to access&nbsp;</p><p style="text-align:justify">Press release: Provisional estimates of Annual National Income, 2020-21 and Quarterly estimates (Q4) of Gross Domestic Product, 2020-21, Ministry of Statistics &amp; Programme Implementation, Press Information Bureau, released on 31 May, 2021, please click <a href="https://pib.gov.in/PressReleasePage.aspx?PRID=1723153" title="https://pib.gov.in/PressReleasePage.aspx?PRID=1723153">here</a> and <a href="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf" title="/upload/files/Press%20Release%20PIB%2031%20May%202021.pdf">here</a> to access &nbsp;&nbsp;</p><p style="text-align:justify">Estimates of Food Consumption Expenditure from Household Surveys and National Accounts -AC Kulshreshtha and Aloke Kar, Central Statistical Organisation (CSO), please <a href="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF" title="https://im4change.org/upload/files/World%20Bank%20paper%20on%20NAS%20and%20NSS%20difference%20in%20consumption%20expenditure.PDF">click here</a> to access&nbsp;</p><p style="text-align:justify">Is the GDP number an underestimate? -Pragya Srivastava, Livemint.com, 2 September, 2022, please <a href="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html" title="https://www.livemint.com/economy/is-the-latest-gdp-growth-data-an-underestimate-11662053646563.html">click here</a> to access</p><p style="text-align:justify">The Real Story Behind India&rsquo;s Two Wheeler Sales or Rather the Lack of It -Vivek Kaul, 19 November, 2020, please <a href="https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/" title="https://vivekkaul.com/2020/11/19/the-real-story-behind-indias-two-wheeler-sales-or-rather-the-lack-of-it/">click here</a> to access&nbsp;</p><p style="text-align:justify">Mind the statistics gap -C Rangarajan and S Mahendra Dev, The Indian Express, 13 December, 2019, please <a href="https://bit.ly/3Dsq9y2" title="https://bit.ly/3Dsq9y2">click here</a> to access&nbsp;</p><p style="text-align:justify">India&rsquo;s GDP: Deflating the right way -Jyoti Sharma, Ideas for India, 12 October, 2017, please <a href="https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html" title="https://www.ideasforindia.in/topics/macroeconomics/india-s-gdp-deflating-the-right-way.html">click here</a> to access</p><p style="text-align:justify">India&rsquo;s GDP: Deflating the right way -Jyoti Sharma, Livemint.com, 12 October, 2017, please <a href="https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html" title="https://www.livemint.com/Opinion/F6IsyPD0eTcSEM5Fb0ZAYK/Indias-GDP-Deflating-the-right-way.html">click here</a> to access</p><p style="text-align:justify">&nbsp;</p><p style="text-align:justify"><strong>Image Courtesy: Inclusive Media for Change/ Shambhu Ghatak</strong></p>'
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Realistic analysis shows that the Indian economy has simply taken little steps in Q1 instead of a quantum leap

There is euphoria abound about India's growth performance during the first quarter of the current fiscal. As compared to the corresponding period last year, the year-on-year (y-o-y) GDP growth in the first quarter (Q1) of 2022-23 is down. However, one should take into account the fact that the high growth performance of the real GDP in Q1 of 2021-22 was due to the low base in the corresponding period of the first pandemic year. The optimism surrounding y-o-y real GDP growth in the first quarter this year therefore appears to be natural.  On further delving into the data, it can be discovered that after two years of the pandemic, the GDP in the Q1 of the current fiscal, crossed the GDP figure corresponding to the Q1 of 2019-20. Please see chart-1.  Source: ** Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2022-23, released on 31 August, 2022, MoSPI, please click here to access  * Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2021-22, released on 31 August, 2021, MoSPI, please click here to access   ## Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2020-21, released on 31 August, 2020, MoSPI, please click here to access  # Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2019-20, released on 30 August, 2019, MoSPI, please click here to access  Note: Kindly click here to access the data in a spreadsheet --- Growth in the real GDP is vital because it provides the government with additional revenue to spend. When the economy expands, it signifies that the economic activities are reaching the level as they existed during the normal times i.e., before the pandemic had struck. With the return of the economy to normalcy, employment generation is expected to take place. Employment creation can lead to a resurgence in effective demand i.e., purchasing power. Measuring real GDP growth after 2 years of the pandemic The GDP at constant prices expanded by 4.1 percent in the last quarter (Q4) of 2021-22. While the real economy grew y-o-y by 13.51 percent in the Q1 as compared to a y-o-y real GDP growth of 20.08 percent in the corresponding period last year, a different picture emerges when the base is shifted to Q1 GDP in the pre-covid times. As compared to the 3-year average of the Q1 GDP pertaining to 2017-18, 2018-19, and 2019-20, the real GDP in the first quarter of the current fiscal expanded by 9.58 percent i.e., less than the y-o-y growth of 13.51 percent. Please take a look at table-1.  Table 1: Quarterly Estimates of Expenditure Components of GDP for Q1 (April-June) at 2011-12 Prices, various years (in Rs. Crore) Source: Same as chart-1 Note: Kindly click here to access the data in a spreadsheet --- As compared to the 3-year average of the GDP during the first quarter of 2017-18, 2018-19 and 2019-20, the real GDP in the corresponding period last year contracted by 3.46 percent. As opposed to that, the y-o-y GDP expansion was to the tune of 20.08 percent in Q1 of 2021-22. Thus, the real GDP growth changes with the change in base and also the base year. All the high frequency indicators aren’t moving in the same direction After the completion of the first quarter of the current fiscal, the Ministry of Statistics and Programme Implementation (MoSPI) has provided the first estimate of the Q1’s GDP. On the basis of about 20 high frequency indicators, the sector-wise estimates have been compiled by the ministry. Out of the 20 indicators, in the case of 'total telephone subscribers' (-2.5 percent), 'cargo handled at airports' (-1.7 percent), and 'Index of Industrial Production (IIP) pertaining to metallic minerals' (-6.5 percent), there has been y-o-y contractions in Q1 of 2022-23 as opposed to positive growths in the corresponding period last year.   In the case of certain high frequency indicators like 'production of cement', 'consumption of steel', 'sales of commercial vehicles', 'purchase of private vehicles', 'cargo handled at major sea ports', 'passengers handled at airports', 'IIP pertaining to mining and manufacturing', 'net tonne kilometer - railways', etc., the y-o-y percentage growth has reduced between Q1 of 2021-22 and Q1 of 2022-23. Two-wheeler sale to the average Indian citizen still down Some economists tend to use the data on two-wheeler sale, which is provided by the industry body Society of Indian Automobile Manufacturers (SIAM). However, the SIAM data is related to the number of units which is sold by the manufacturers to dealers across the country. During economic slowdown, dealers may be unable to sell the products they purchase from manufacturers, which could lead to building up of inventory with the former. Hence, the SIAM data may not capture the real situation i.e., the number of two-wheelers bought by the final consumers.  Source: Vahan registration website, Ministry of Road Transport and Highways, please click here to access  Note: Kindly click here to access the data in a spreadsheet --- Instead of using SIAM data on two-wheeler sale, the data that is provided by Vahan dashboard on vehicle registration, is used in the present piece. As compared to the 3-year average of the number of two-wheelers (sum of non-transport and transport-two-wheelers) registered during April-June of 2017, 2018 and 2019, the number of two-wheeler vehicles registered in the first quarters of 2020, 2021 and 2022 has been lower. In short, if the number of two-wheelers registered is used for analysis, then it shows that the purchasing power of the average Indian consumer has still not reached the pre-pandemic level. Please have a look at chart-2.  Whatever happened to consumer demand? The Private Final Consumption Expenditure (PFCE) represents the value of goods and services consumed by the households and the private non-profit institutions serving households (NPISHs) in the period extending from the beginning of April of one calendar year to the end of March of the next. In 2021-22 (provisional estimates), PFCE i.e., final consumer spending (at 2011-12 prices) as a proportion of GDP (at 2011-12 prices) was 56.85 percent. Therefore, the revival of consumer demand is essential for boosting economic growth. The y-o-y growth rates of PFCE (at constant prices) were 8.88 percent in 2017-18, 6.61 percent in 2018-19, and 4.45 percent in 2019-20 (2nd revised estimates). However, the y-o-y growth rates of PFCE (at constant price) dipped to -6.0 percent in 2020-21 (1st RE) but bounced back to 7.91 percent in 2021-22 (PE). Please see table-2. Table 2: Provisional Estimates of National Income and Expenditure Components of GDP, various years (at 2011- 12 Prices) Source: ** Press Note on Provisional Estimates of Annual National Income 2021-22 and Quarterly Estimates of Gross Domestic Product for the Fourth Quarter (Q4) of 2021-22, released on 31 May 2022, MoSPI, please click here to access   # Press Note on First Advance Estimates of National Income 2020-21, released on 7 January, 2021, MoSPI, please click here to access   ## Press Note on First Advance Estimates of National Income 2019-20, released on 7 January, 2020, please click here to access   #* Press Note on First Advance Estimates of National Income 2018-19, released on 7 January, 2019, please click here to access   ^* Press Note on First Advance Estimates of National Income 2017-18, released on 5 January, 2018, please click here to access   ^^ Press Note on Provisional Estimates of National Income 2016-17, released on 31 May, 2017, please click here to access  Note: Kindly click here to access the data in a spreadsheet --- As compared to the 3-year average of the PFCE (at constant prices) pertaining to 2017-18, 2018-19, and 2019-20 (2nd RE), the real PFCE in 2020-21 (1st RE) and 2021-22 (PE) grew by -1.25 percent and 6.56 percent, respectively. The advance estimates of GDP (at 2011-12 prices) for 2022-23 would be released in January next year. Till then, we will have to wait for commenting further about the sustained growth of consumer demand. Experts have suggested that in order to gauge consumer demand and income poverty, consumption expenditure survey of households by the National Statistical Office (NSO) needs to be done and the results are required to be published along with the release of unit-level data. It is worth noting that the gap between the National Accounts Statistics (NAS) estimates of PFCE and the National Sample Survey (NSS) estimates of household consumption expenditure (aggregated at the national level) has grown progressively over the years.  An alternative perspective As said earlier, the y-o-y growth of GDP at constant prices during Q1 of 2022-23 was 13.5 percent, whereas the y-o-y growth of GDP at current prices during the same period was 26.7 percent. It means that the GDP deflator grew y-o-y by 13.2 percent.  Likewise, the y-o-y growth of real Gross Value Added (GVA) at basic prices during Q1 of 2022-23 was 12.7 percent, whereas the y-o-y growth of GVA at basic prices at current prices during the same period was 26.5 percent. So, the GVA deflator grew y-o-y by 13.8 percent.  In order to arrive at GDP at constant prices from GDP at current prices, one needs a deflator. In the case of single deflation method, a common price deflator is utilised to adjust both input and output prices. For double deflation method, one needs two different deflators for adjusting input and output prices. In India, double deflation is done for agriculture, and mining and quarrying, whereas single deflation is used for other sectors. Thus, in our country, a mix of single and double deflation methods is used.    A recent analysis by Pragya Srivastava, published in Livemint.com, tells us that the GDP deflator on an average reflects 70 percent of the Wholesale Price Index (WPI) and 30 percent of the Consumer Price Index (CPI). As per HSBC Global Research, input prices (reflected by WPI rise) in the Q1 of 2022-23 have grown faster than the output prices (indicated by the CPI increase), possibly leading to an underestimation of GVA growth, and therefore GDP growth. Remember, GDP at market prices is derived as the sum of the GVA at basic prices, plus all taxes on products, less all subsidies on products. In the case of single deflation method, if input (indicated by WPI) and output (reflected by CPI) prices expand at different rates, then it may cause overestimation or underestimation of economic performance. A technical discussion by Jyoti Sharma (please click here and here to access) informs us that ideally, the GDP deflator of the MoSPI lies in the range {min. (CPI, WPI), max. (CPI, WPI)} i.e., the deflator must fall in the range defined by minimum of CPI and WPI and maximum of CPI and WPI for a sector. She proposes that in the case of double deflation method, CPI as a deflator for output value, and WPI for input value should be used. Instead of going for mix method, which India uses, one should go for either single or double deflation method across the sectors and sub-sectors in order to compare the trends across sectors. References:  Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2022-23, released on 31 August, 2022, MoSPI, please click here to access  Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2021-22, released on 31 August, 2021, MoSPI, please click here to access   Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2020-21, released on 31 August, 2020, MoSPI, please click here to access  Press Note on Estimates of Gross Domestic Product for the First Quarter (April-June) 2019-20, released on 30 August, 2019, MoSPI, please click here to access  Vahan registration website, Ministry of Road Transport and Highways, please click here to access  Press Note on Provisional Estimates of Annual National Income 2021-22 and Quarterly Estimates of Gross Domestic Product for the Fourth Quarter (Q4) of 2021-22, released on 31 May 2022, MoSPI, please click here to access   Press Note on First Advance Estimates of National Income 2020-21, released on 7 January, 2021, MoSPI, please click here to access   Press Note on First Advance Estimates of National Income 2019-20, released on 7 January, 2020, please click here to access   Press Note on First Advance Estimates of National Income 2018-19, released on 7 January, 2019, please click here to access   Press Note on First Advance Estimates of National Income 2017-18, released on 5 January, 2018, please click here to access   Press Note on Provisional Estimates of National Income 2016-17, released on 31 May, 2017, please click here to access  Press release: Provisional estimates of Annual National Income, 2020-21 and Quarterly estimates (Q4) of Gross Domestic Product, 2020-21, Ministry of Statistics & Programme Implementation, Press Information Bureau, released on 31 May, 2021, please click here and here to access    Estimates of Food Consumption Expenditure from Household Surveys and National Accounts -AC Kulshreshtha and Aloke Kar, Central Statistical Organisation (CSO), please click here to access  Is the GDP number an underestimate? -Pragya Srivastava, Livemint.com, 2 September, 2022, please click here to access The Real Story Behind India’s Two Wheeler Sales or Rather the Lack of It -Vivek Kaul, 19 November, 2020, please click here to access  Mind the statistics gap -C Rangarajan and S Mahendra Dev, The Indian Express, 13 December, 2019, please click here to access  India’s GDP: Deflating the right way -Jyoti Sharma, Ideas for India, 12 October, 2017, please click here to access India’s GDP: Deflating the right way -Jyoti Sharma, Livemint.com, 12 October, 2017, please click here to access   Image Courtesy: Inclusive Media for Change/ Shambhu Ghatak