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  • Raghav Sand

IndEcon March 2022

War is cruel. It separates families and dismantles communities. In the name of aid and support opportunists try to mint money on the side lines of a conflict. Wars do not spare anyone. Geo-political tensions create a us versus them situation. Prices of essential commodities like food and fuel rise exponentially, while sanctions imposed on the aggressor sow the seeds of economic catastrophe.

India has chosen to stay neutral in the Russia-Ukraine war. After two years of economic downturn due to the pandemic the Indian economy was trying to get back on its feet, but Russia had other plans. In all this chaos, everyday life and policy-making must go on.

There is no single statistic or metric that is capable to project the state of the economy. Just like the pieces of a jigsaw puzzle, variables such as, tax collections, inflation, employment data, consumer spending etc., help to gauge the health of economy. Inflation may finally get attention from the Reserve Bank of India (RBI) and the excess liquidity in the system will be sucked out sequentially. The RBI has a lot of work to do before inflation is brought down to tolerable levels. Whatever happens, we cannot compromise with growth and job creation.

Goods and Services Tax

The gross GST revenue collected in the month of February 2022 was ₹1,33,026 crore. The revenues for the month of February 2022 were 18% higher than the GST revenues in the same month last year and 26% higher than the GST revenues in February 2020. During the month, revenues from import of goods was 38% higher and the revenues from domestic transaction (including import of services) are 12% higher than the revenues from these sources during the same month last year.

February, being a 28-day month, normally witnesses revenues lower than that in January. This high growth during February 2022 should also be seen in the context of partial lockdowns, weekend and night curfews and various restrictions that were put in place by various States due to the omicron wave, which peaked around 20 January.

Automobile Sector

The Indian auto industry is not anywhere close where it wants to be. Volumes have not kept pace with industry expectations as total retails are down by -9.21% YoY and -20.65% when compared to February’20, a regular pre-covid month.

The rural market accounts for a big chunk of the two-wheeler sales. And, this is where the recovery has been slower as compared to the cities. Cost of acquiring a two-wheeler has been rising for some time now. As corporates and educational institutions continued operating from home, urban demand also took a hit.

New launches in the passenger vehicle segment did manage to revive consumer interest but long waiting period is playing spoilsport. While commercial vehicles are not at similar levels when compared to pre-covid months, slight recovery on yearly basis was visible majorly due to low base effect. This coupled with increase in government’s infrastructure spending saw continued traction in heavy commercial vehicles. Fleet operators have slowly started purchasing vehicles.


There has been steady rise in price of almost all goods and services in the past quarter. Clothing and footwear prices have been heading upwards for quite some time now, and month of February was no exception. As businesses ask their remote workers to report for work in offices, urban housing market is witnessing a recovery. Education, fuel cost, personal care items registered noticeable increase throughout the country.

Fuel price increase was held back due to assembly elections. Now that the governments in respective states have been sworn in, oil marketing companies (OMCs) have started to pare their losses.

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