Business Matters | The good and not-so-great takeaways from India’s macroeconomic numbers

In this episode of Business Matters, we discuss the good and not-so-great takeaways from India’s macroeconomic numbers.

The last few days have seen a flurry of macroeconomic data being released. Most are monthly releases, but the big one was the quarterly GDP data. Did we spot patterns emerge across data points? The answer to that is a mixed yes and no. Let’s see why.

India’s GDP grew 6.1% in the fourth quarter of the year 2022-23 taking full-year growth to 7.2%. The data did beat expectations. The RBI’s estimate for Q4 was below 6%. 

Agri, trade & hotels and construction did well in FY23, while manufacturing too grew by 4.5% in Q4, after contracting in the preceding two quarters. Construction showed the highest GVA growth among sub-sectors in Q4 with 10.4% growth. Agriculture GVA grew 5.5% in Q4 on the back of record Rabi output despite heatwave impact.

Growth in gross fixed capital formation improved to 8.9% in Q4 from 8% in Q3 which means investments in both the public and private sectors had picked up. The Hindu reported last month that the announcements indicating intent to invest had risen sharply in the January-March quarter, recording the highest-ever total fresh investments of ₹14.6 lakh crore, led by private sector outlays that also hit an all-time high of ₹10.5 lakh crore. 

Other good news is on inflation and indirect tax collections. 

 Mid-May, the government released data on price rise for April. Inflation had slowed on the back of a year-on-year softening in food price gains. The Consumer Food Price Index declined to 3.84% from the previous month’s 4.79%. Price rise in cereals, which have the highest weight of almost 10% in the CPI, decelerated to 13.7%, from 15.3% in March. 

The government’s revenue collections on the Goods and Services Tax front have been healthy. GST revenues have exceeded the ₹1.4-lakh figure for 15 successive months, and May’s figures mark only the sixth time that GST revenues have crossed the ₹1.5-lakh crore mark. Four of those occasions have been in 2023.