India’s GDP for FY 2022-23 Projected at 7%: Second Advance Estimates

On February 28, 2023, the Ministry of Statistics and Programme Implementation (MoSPI) released the second advance estimates of India’s GDP for FY 2022-23. Such advance estimates helps the government decide on budget allocation and give policymakers more information on the expected trajectory of the economy in the upcoming year.

On February 28, 2023, the Ministry of Statistics and Programme Implementation (MoSPI) released a press note for the second advance estimates of India’s GDP (National Income) for the Financial Year (FY) 2022-23. These are an update over the first advance estimates released on January 7, 2023.

The second advance estimates peg India’s GDP for FY 2022-23 at seven percent. It must be noted that the Asian Development Bank (ADB) has projected the Indian economy to expand seven percent while the International Monetary Fund (IMF) has pegged growth at 6.8 percent in FY 2022-23.

What are the second advance estimates for India’s national income in FY 2022-23?

Real GDP

According to the data, the growth in GDP at constant prices (2011-12), or real GDP, during FY 2022-23 is estimated at seven percent – lower than the 9.1 percent registered in FY 2021-22.

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In terms of value, real GDP for the year 2022-23 is estimated at INR 159.71 trillion (US$1.94 trillion) as against the first revised estimates of GDP for FY 2021-22 at INR 149.26 trillion (US$1.81 trillion).

Real gross value added (GVA) at basic prices is estimated at INR 147.12 trillion (US$1.78 trillion) in 2022-23, showing a growth of 6.6 percent over the previous fiscal.

Nominal GDP

The growth in GDP at current prices, or nominal GDP, during FY 2022-23 is estimated at 15.9 percent.

For FY 2022-23, the nominal GDP is estimated at INR 272.04 trillion (US$3.30 trillion) as against the first revised estimates of GDP for the year 2021-22 of INR 234.71 trillion (US$2.85 trillion).

Nominal GVA at basic prices is estimated at INR 247.07 trillion (US$2.99 trillion) in 2022-23, registering a growth of 15.2 percent over previous fiscal.

What are the sectoral growth estimates for FY 2022-23?

The second estimates of GVA at basic prices by economic activity indicate positive growth across all sectors, with services like trade, tourism, and hospitality driving momentum. These sectors are followed by construction and utility service industries like electricity, gas, etc., which are anticipated to grow at the fastest rates.

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Enabling government policies are expected to further catapult these sectors towards an upward growth trajectory. 

These sectoral estimates have been compiled using indicators like:

• Index of Industrial Production (IIP)
• Financial performance of listed companies in the private corporate sector available for first three quarters of FY 2022-23
• Second advance estimates of crop production for FY 2022-23
• Production targets for FY 2022-23 and production estimates of major livestock products for summer and rainy seasons of FY 2022-23
• Fish Production
• Production or consumption of cement and steel
• Net ton kilometres and passenger kilometres for railways
• Passengers and cargo handled by civil aviation
• Cargo handled at major sea ports
• Bank deposits and credits
• Accounts of central and state governments available for first 10 months of FY 2022-23
• Data for sale of commercial vehicles

How many revisions of GDP estimates are done?

For each financial year beginning in April, the GDP estimates go through several rounds of revisions. Each year on January 7, the MoSPI releases the first advance estimates. Subsequently, on February 28, after incorporating the data from the third quarter (Q3 – October to December), the MoSPI releases the second advance estimates.

By May-end, the government of India publishes the provisional estimates after incorporating fourth quarter (Q4 – January to March) data.

Then, in January-end of the subsequent FY, the MoSPI releases the first revised estimates for the previous fiscal. These will be followed by the second and third revised estimates in January month of subsequent fiscal years.

Each revision benefits from more data, making the GDP estimates more accurate and robust.

How are second advance estimates compiled and why are they important?

The benchmark-indicator approach is used to compile the advance estimates of national income, which entails extrapolating the estimates for the benchmark year—in this case, 2021–22—using the relevant indicators that indicate the performance of various sectors.

In the course of developing the second advance estimates 2022-23, the provisional estimates of 2021-22 that were used to create the first advance estimates have been replaced by the first revised estimates of 2021-22, which were prepared using official data from industry and respective institutions.

Such advance estimates help the government decide on the allocation of the Union budget. Additionally, they also provide a broad picture of how the economy is expected to perform in the upcoming year, thereby assisting the government and stakeholders in policy formulation and decision making.

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