Union Budget 2022: Key measures govt must take to address demand-side issue

The country's annual financial exercise this year, comes at a juncture when the outlook on both, global and domestic growth is uncertain in the context of the pandemic trajectory

The prolonged Covid pandemic had a significant impact on economic activity in FY21 when the real GDP contracted by 7.3%. While the pandemic continued in FY22 with an intense second wave in Q1FY22 and a nascent third wave in Q4FY22, the economy has witnessed a revival with expected GDP growth in the range of 9-10% for the current fiscal, which highlights that the economic output has exceeded the pre-pandemic levels. What has driven the revival is robust growth in public capital expenditure and exports, the latter fuelled by the demand recovery in the developed economies. Private consumption demand, however, remains