An optimistic business environment, robust industrial output and rapid vaccination coverage have provided a strong momentum for the growth of India’s economy, with a GDP growth of 8.7 per cent estimated for the previous financial year.

Various parameters such as total GST collections, the quantum of digital transactions, FASTag collections, demand for electricity, passenger and freight traffic via rail and air, petroleum products consumption and coal production displayed a positive trajectory, pointing towards a continued economic recovery, despite the new year commencing with concerns around the third wave of COVID-19 and the possible roadblocks that could arise from it. Resilience in the agriculture sector also add to the positive outlook of the economy. An upward trend was also visible in automobile registrations across most categories, despite availability of semiconductor remaining a key challenge.

The Union Budget for FY23 that was presented in February 2022 lays focus on infrastructure creation, with a capex that is 35.4 per cent higher than that of the previous year. There is also a focus on policy initiatives to promote public private partnerships (PPP) in infrastructure development. The continued emphasis of the government on capex is expected to further promote economic activity, support job creation and attract foreign as well as private investments. The government’s estimated fiscal deficit of 6.7 per cent of the GDP for FY22 is also lower than the 9.2 per cent recorded in FY21, with the fiscal deficit for FY23 estimated at 6.4 per cent.

While various macroeconomic parameters point towards a sustained growth for the country, it is imperative that global developments, such as the geopolitical unrest in Ukraine, growing tensions between China and the West, supply chain disruptions, and rising commodity prices, which can derail the progress, are kept in mind. These factors have already left a mark on the economy, as seen in a rise in inflation, with the Consumer Price Index (CPI) hovering above the Reserve Bank of India’s threshold since January 2022.

Keeping these factors in the backdrop, we at KPMG in India have published the latest edition of ‘Indian Economy Insights’, an assessment of key trends and growth drivers, global market sentiment, and potential roadblocks to India’s economic progress.


Growth in the mining and services sectors led to India’s GVA rising by 3.9 per cent during the fourth quarter of FY22.

However, growth across sectors were affected in Q4 FY22, with manufacturing being the most affected. The construction sector, however, staged a marginal recovery in Q4 2022 in comparison to the previous quarter.

India witnessed one of the highest GST collections in March 2022 driven by economic recovery and anti-evasion measures, particularly against fake billers.

Unemployment rates fluctuated in Q4 FY22, reducing sharply in January to the lowest value achieved in the financial year and rising again to a six-month high in February.

Indian economy insights
Indian economy insights