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Q1 FY 2022 GDP: Private Consumption Picks Up, Govt Spending Sees A Decline


The high GDP for the q1Fy22 is largely on account of low base effect as well as a rebound in the consumer sentiment which bottomed out amid the first and second Covid wave.

Q1 FY 2022 GDP: Private Consumption Picks Up, Government Spending Sees A Decline

Now even as the GDP has come largely in line with the estimates what needs a mention is that NSO data reveals that while household consumption has risen and there remain hopes of further rebound, government spending has slipped.

Importantly, the gauge representative of a pick-up in private final consumption expenditure (PFCE) ticked higher 19.35 percent to Rs. 17.83 lakh crore in the Q1 period. Nevertheless on a sequential basis, PFCE for the period under review i.e. April to June period of FY22, the PFCE constituted 55.1 percent of GDP, down from 55.4% in Q4Fy21.

The government expenditure receded by as much as 4.77% as against 7.8% increase in the previous fiscal year. This is even as the government announced a host of monetary and fiscal measures to revive the economy. The government expenditure for the period totalled to Rs. 4.21 lakh crore during the period, and likewise Government Final Consumption Expenditure (GFCE) constituted 13 percent of the GDP, down from 16.4 per cent.

Read more about: gdp government spending
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