Economic Survey 2021-22: Total consumption growth estimated at 7% in FY22, govt to be biggest contributor, private consumption poised to grow strongly

31 Jan 2022 , 02:46 PM

In the Economic Survey 2021-22, the country’s total consumption is estimated to have grown by 7.0 per cent in 2021-22 with government consumption remaining the biggest contributor as in the previous year.

As per the Survey, government consumption is estimated to grow by a strong 7.6 per cent surpassing pre-pandemic levels. Private consumption is also estimated to have improved significantly to recover 97 per cent of the corresponding pre-pandemic output level. It said, “This is supported by a sharp rebound in HFIs like IIP Consumer Durables.”

However, the Survey also pointed out that the recent dip in vehicle registrations reflects persistent supply-side constraints owing to the shortage of semi-conductor chips rather than lack of consumption demand.

Further, RBI’s consumer confidence survey results on both the present situation and future expectations suggest a sustained uptick in consumer sentiments.

“Also indicative of an uptick in consumer sentiments is the steep rise in digital transactions, notably in UPI payments owing to the pandemic induced a shift to contactless payments,” the Survey added.

The Survey said that “Private consumption is poised to see stronger recovery with rapid coverage in vaccination and faster normalisation of economic activity.”