Hindi English Translation || Editorial || Good growth, low demand: On the NSO projection

Good growth, low demand: On the NSO projection

Government spending seems to be propping up growth

The first advance estimates of national income for the current fiscal year present a picture of an economy on steroids (A large class of organic compounds with a characteristic molecular structure containing four rings of carbon atoms) — of government spending. While the NSO has made bold to project real GDP growth marginally quickening to a 7.3% pace, from 2022-23’s 7.2%, scrutiny (जांच) of sectoral output figures that together form the gross value added, and the demand data reflected (प्रतिबिंबित होना) in expenditure numbers posit an economy still searching for durable (स्थायी) drivers of consumption (उपभोग)-led growth. While overall GVA growth is seen slowing to 6.9%, from the preceding fiscal’s 7%, the agriculture, livestock, forestry and fishing sector — the bedrock of the rural economy, one of the largest providers of work and the second-largest generator of economic value outside the services economy — will see output expanding by 1.8%, the slowest in eight years and less than half of 2022-23’s 4% pace. And even this pace of growth may be optimistic given the estimated shortfall (कमी) in kharif output and lag in rabi sowing, particularly in paddy and pulses. Equally, the second-largest component of the services economy, the omnibus trade, hotels, transport, communication and broadcasting sector — also a large provider of jobs — is estimated to witness more than a halving in the pace of growth — to 6.3%, from 14% last fiscal. Here too, the estimates reflect the trend evident in the NSO’s November 30 release of second-quarter GDP estimates, and underscore the underlying loss of momentum in the post-pandemic rebound (पुनः प्राप्त होना) in services.

On the demand side, private final consumption expenditure — the largest component of GDP with a share that till two decades ago exceeded 60% — is projected to log its slowest non-pandemic year expansion (विस्तार) in more than 20 years. At 4.4%, private consumption spending growth is estimated to have been at its lowest ebb since the pandemic and accompanying lockdowns caused spending to contract by more than 5% in 2020-21, and just over half of 2022-23’s 7.5% pace. With the rural economy struggling under the impact of the monsoon vagaries (An unexpected and inexplicable change in a situation or someone's behavior; a whimsical or erratic notion) and the resultant weakness in farm output, demand for producers of a range of goods from soaps and detergents to packaged foods and two-wheelers is yet to regain any kind of vigour in the hinterland. Gross fixed capital formation, which includes government capital spending, remains the main bright spot and driver of momentum (गति). The NSO pegs GFCF growing 10.3% to reach a record 34.9% share of GDP this fiscal. With the general election just ahead, policymakers face an unenviable choice — keep the spending spigot fully open to prop up growth at the risk of fiscal slippage (गिरावट), or tighten the purse strings and risk further loss of momentum.

Courtesy: The Hindu

Important Word List With Meaning

1.Projection (Noun)

Hindi Meaning - प्रक्षेपण
English Meaning - The act of estimating or forecast, a planned or proposed undertaking.

2.Durable (Adjective)

Hindi Meaning - स्थायी
English Meaning - Able to withstand wear, pressure, or damage; lasting.

3.Scrutiny (noun)

Hindi Meaning - जांच
English Meaning - Critical examination, inspection, or observation.

4.Consumption (Noun)

Hindi Meaning - उपभोग
English Meaning - The act of using up a resource, such as goods or services; the process of using or eating something.

5.Shortfall (noun)

Hindi Meaning - कमी
English Meaning - A deficit or inadequacy in the amount needed or expected; a lack or shortage.

6.Reflect (Verb)

Hindi Meaning - प्रतिबिंबित होना
English Meaning - To think deeply or carefully about something; to consider or contemplate.

7.Rebound (Noun)

Hindi Meaning - पुनः प्राप्त होना
English Meaning - To bounce back after hitting a surface; to recover or revive after a setback or decline.

8.Expansion (noun)

Hindi Meaning - विस्तार
English Meaning - The action of becoming larger or more extensive; the process of enlarging or increasing.

9.Slippage (noun)

Hindi Meaning - गिरावट
English Meaning - The act or process of slipping or sliding; a gradual decrease or decline in progress or quality.

10.Momentum (noun)

Hindi Meaning - गति
English Meaning - The strength or force gained by motion or a series of events; the impetus or driving force behind a development.

11.Vagary (Noun)

English Meaning - An unexpected and inexplicable change in a situation or someone's behavior; a whimsical or erratic notion.

12.Steroid (Noun)

English Meaning - A large class of organic compounds with a characteristic molecular structure containing four rings of carbon atoms.