India's gross domestic product (GDP) growth rate for the December quarter of the fiscal year 2023-24 has astounded observers, reaching 8.4%, a figure that even the Reserve Bank of India was not expecting. Currently when eurozone economies are stagnant and China, the second-biggest economy, faces headwinds, India's growth is perhaps the only bright spot in a world racked by geopolitical tensions.
"Robust 8.4% GDP growth in the third quarter of 2023-24 shows the strength of Indian economy and its potential. Our efforts will continue to bring fast economic growth which shall help 140 crore Indians lead a better life and create a Viksit Bharat," Prime Minister Narendra Modi posted on X (formerly Twitter).
There has been considerable debate regarding the reliability of GDP data in recent quarters, with critics suggesting potential inflation through methodological jugglery.
The latest data sets have received similar criticism, with some pointing to the disparity between gross value added (GVA) and GDP.
While GDP is a measure of the total value of goods and services produced within a region's borders, GVA is the value producers add to the goods and services they buy, and thus provides an insight into the raw economic output within the country.
Mathematically, GVA is calculated by adding subsidies to the GDP and subtracting indirect taxes (GST).
In the December quarter of 2023-24, the disparity between India's GDP and GVA figures reached a 10-year high. During the recent quarter, while India recorded a GDP growth rate of 8.4%, its GVA grew by only 6.5%-reflecting a significant divergence of 190 basis points.
"The wide gap [between GVA and GDP numbers] follows from a surge in growth of net indirect taxes to a six-quarter high of 32% in this quarter, which is unlikely to be sustainable," says Aditi Nayar, chief economist at ratings agency, ICRA.
Esta historia es de la edición April 2024 de Outlook Business.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.
Ya eres suscriptor ? Conectar
Esta historia es de la edición April 2024 de Outlook Business.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.
Ya eres suscriptor? Conectar
Scale Stimulus
For technology start-ups, growth funding serves as the catalyst to scale, innovate, expand into new markets and make critical hires. New capital brings strategic value through investor expertise and industry network, customer introductions, helps maintain operational efficiency and mitigate cashflow challenges.The landscape of venture and growth financings in India has undergone a major shift since the pre-Covid era. The pandemic gave rise to a low-interest rate environment which saw an unprecedented inflow of capital into Indian start-ups with a very strong focus on high growth, often at the cost of high burn. Post-pandemic, the environment has seen a significant shift in focus towards sustainable growth, profitability and efficient unit economics.
The Best Valuation Need Not Be the Highest
Info Edge founder and veteran start-up investor Sanjeev Bikhchandani talks to Deepsekhar Choudhury about high valuations and corporate governance in start-ups. Edited excerpts
GCCS Shaping Start-Ups
The remarkable journey of global capability centres (GCCs) in India continues to set new benchmarks, enriching the nation's economic narrative.
Behind the Scenes
Evaluating start-ups is more than number crunching. While some factors are quantifiable, many are more nuanced. Here's a sneak peek inside the war room from where the rankings emerged
Start-Ups have Generated 17.28 Lakh Direct Jobs
Amardeep Singh Bhatia, secretary, department for promotion of industry and internal trade (DPIIT) tells Pushpita Dey about the government's various schemes to give start-ups a leg up.
On the Road Less Travelled
Our entrepreneurial journey as the founders of the CarDekho group proves the fact that ambition and ingenuity can flourish in the most unexpected places.
Being Local Matters
India's rapidly evolving consumer market, backed by a young, progressive population and a flourishing middle class, is a landscape of opportunity and complex challenges.
CELEBRATING EXCELLENCE: OUTLOOK BUSINESS SPOTLIGHT - ACHIEVERS AWARDS 2024
Recognizing Visionaries Who Inspire Growth, Innovation, and Progress
At the End of the Day, You Bet on Founders
Zerodha founder and chief executive Nithin Kamath tells Deepsekhar Choudhury that the philosophy of a company is what sets it apart and makes it special. Edited excerpts
Time to Go Global
India's defence and space start-up ecosystems have witnessed exponential growth in recent years, with over 1,000 defence and 250 space start-ups driving deep-tech innovation. Government initiatives such as Innovations for Defence Excellence (iDEX), positive indigenisation lists and allocation of 75% of the defence capital budget for domestic procurement, along with support from Indian National Space Promotion and Authorisation Centre (InSpace), have created vast opportunities.
