Can Growth Be Sustained?

The provisional estimates of the annual national income for 2021–22 and the quarterly estimates of the gross domestic product (GDP) for the fourth quarter released by the National Statistical Office present a bleak picture. Numbers show that the GDP growth in 2021–22 has bounced back to 8.7% after the 6.6% decline in 2020–21. But the quarterly growth rates have steadily declined from 20.1% to 8.4% and then to 5.4% and further to 4.1% over the year.

The optimists point out that the size of the GDP at `147.35 lakh crore in 2021–22 is 1.5% higher than in 2019–20, which means that the economy has bounced back to the pre-pandemic levels in a single year. They also argue that the pickup has been extensive with seven of the eight segments of the economy (except for trade, hotel, transport, and communications) recovering back to the pre-pandemic levels. However, this improvement in the GDP is notional. This is because the real per capita income or the average amount of money earned per person adjusted for inflation, which measures the standard of living, is only `91,481 in 2021–22, which is still 0.7% lower than in 2018–19. It means that the quality of life of the nation and citizens’ overall well-being is still lagging by at least four years.