The national income data released by the National Statistical Office on Tuesday pegs the economy to grow at 7%. The third quarter growth at 4.4% was also in line with the RBI’s expectations. Expansion in the fourth quarter of 2022-23 is expected to be 5.1%.
The advance estimates of national income for the full financial year, 2022-23, is likely to be 7%. Given that the economy is still recovering from the fallout of the two-year-long Covid pandemic hiatus, should the economy expand by 7% in the current fiscal it will be a creditable feat.
This optimism also stems from the fact that contrary to the fears of a deep recession in the global economy, in reality the Western economies seem to be in a position to register a small expansion, at least not a deep cut in growth as feared earlier. India of course is set to be among the highest growing economies mainly due to two factors. One, escaping the harsh result of the Russian invasion of Ukraine on the widespread disruption of energy supplies, and, two, being prudent in spending cash at the height of the Covid pandemic while providing free vaccines and food to the population. The import of Russian oil at discounted rates in ever greater quantities has been the sole silver lining in the dreary post-Ukraine war scenario.
The data released on Tuesday however paints a bleak picture of the manufacturing sector which is crucial for job creation. Manufacturing is projected to grow barely by 4% in full year, having actually contracted in the second and third quarters. The service sector however grew at a decent clip. With the opening up of the economy, travel, hotels, entertainment, transport, communications etc have seen a welcome buoyancy. Even the real estate sector, a major consumer of steel and cement and a big employer of skilled and unskilled labour, was once again picking up following the near stagnancy of the Covid years. Agriculture, forestry and fisheries too grew by 3.7% in the last quarter as against 2.3% in the same quarter last year. Meanwhile, the full-year data for growth in 2021-22 was revised to 9.1% as against the previous figure of 8.8%. In 2020-21 growth contracted by 5.8% as against the previous estimate of (-) 6.6%, suggesting that the effect of the pandemic slowdown was less severe than previously feared.
As for the projection for the next financial year, earlier the Economic Survey estimate of 6 to 6.8% seems rather optimistic, especially given a below par growth in the second half of the current financial year. The RBI projects 6.4% growth in the next financial year. Considering that nine state elections are to be followed by a general election in April-May 2024, fears of populist giveaways by the states and the centre can impact the overall state of the fisc. Yet, undoubtedly despite growing confrontation in the political arena, the management of the economy by and large has been sound, making India one of the fastest growing economies in the world.
India did it soon after the Galwan attack two years ago. It is now the turn of the Western world to have a close second look at various China-origin social media apps. Given the rising suspicion and distrust between the West and China, it is not surprising that the axe seems to be falling on the popular video-sharing app, TikTok. With over 120 million users in the US alone, TikTok was under the radar of the intelligence agencies for some time. Even when its Chinese makers sought to reassure, by locating the data storage and the servers within the US, doubts lingered about its close contacts with the Chinese security agencies. Earlier China had passed a law making it obligatory for all tech companies to hand over data whenever sought in national interest. In the last couple of days both the US and Canada have banned TikTok from all government-issued mobile devices. In Europe too a similar ban is under consideration. Though a Chinese government spokesman has strongly protested, accusing the Western governments of being paranoid, it is actually for the Chinese ruling party to ponder why increasingly the world sees it with suspicion and distrust. The aggressive Chinese designs on other nations’ marine, land and space rights, belligerence towards all its neighbours, etc explain why even its erstwhile main benefactor, the US, has grown wary of its agenda. Ban on TikTok may be the first necessary step before several others, to safeguard national security against aggressive Chinese designs.
(To receive our E-paper on WhatsApp daily, please click here. To receive it on Telegram, please click here. We permit sharing of the paper's PDF on WhatsApp and other social media platforms.)