'India’s economic growth in FY23 has been principally led by private consumption and capital formation', says the Economic Survey.
As the Indian economy recovered from the shock induced by the Covid pandemic, private consumption replaced export stimuli as the leading driver of growth, according to the Survey.
'The uptick in private consumption', in turn, gave 'a boost to production activity resulting in an increase in capacity utilisation across sectors'.
But what led to the rebound in the private consumption in the first place?
According to the Economic Survey, 'the rebound in consumption was engineered by the near-universal vaccination coverage'.
This brought people 'back to the streets to spend on contact-based services, such as restaurants, hotels, shopping malls, and cinemas', etc.
With over 200 crore doses administered so far, India's vaccination programme and its efficacy also helped in lifting consumer sentiments.
Secondly, and equally, vaccinations 'facilitated the return of migrant workers to cities to work in construction sites as the rebound in consumption spilled over into the housing market'.
The effect of this, according to the Survey, is evident in the 'significant decline in inventory overhang to 33 months in Q3 of FY23 from 42 months last year'.
Today, even as China battles rising Covid cases and with the efficacy of its indigenous vaccine always under doubt, India appears to be back on the pre-pandemic growth path.
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