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  While the 7.4% GDP growth number for 4QFY25, and claims of continuing strong growth momentum in April 2025 are encouraging, the RBI assessment of FY26 growth and aggressive policy stance raise some doubts. A careful analysis of the GDP data released by the NSO also leaves some doubts about the consistency and sustainability of the 4QFY25 growth numbers. Many economists have noted discrepancies and incongruencies in the data, as well as comparisons with other economic indicators and external analyses. For example, I found the following noteworthy. Discrepancy Between GDP and GVA Growth Rates In Q4 FY25, GDP growth is 7.4%, while GVA growth is 6.8%. The divergence between GDP and GVA growth rates is notable, as GDP includes net taxes (taxes minus subsidies), which can distort the picture of underlying economic activity captured by GVA. The gap suggests that tax revenues or subsidy adjustments may have inflated GDP growth relative to GVA. For instance, higher GST collections or redu...

The National Statistical Office (NSO) released provisional estimates (PE) of the annual growth statistics for the Indian economy, last Friday. The data indicates that the Indian economy grew at a rate of 7.4% (real GDP) in 4QFY25 and at a rate of 6.5% for the full year FY25. The key highlights of the growth data could be listed as follows: FY25 Growth Real GDP:  Estimated at  ₹ 187.97 lakh crore at constant (2011-12) prices. Growth rate:  6.5% compared to  ₹ 176.51 lakh crore in FY 2023-24 (8.2% growth in FY24). Nominal GDP:  Estimated at  ₹ 330.68 lakh crore. Growth rate:  9.8% compared to  ₹ 301.23 lakh crore in FY 2023-24. Real Gross Value Added (GVA):  Estimated at  ₹ 171.87 lakh crore at constant prices. Growth rate:  6.4% compared to 7.2% in FY 2023-24. Nominal GVA:  Growth rate: 9.5% compared to 8.5% in FY 2023-24. Quarterly GDP Estimates for Q4 FY 2024-25 (January-March 2025) Real GDP:  Estimated at  ₹ 51.35 l...

Recently the Ministry of Statistics and Program Implementation, Government of India, released the results of the latest Annual Survey of Industries (ASI) for the reference period FY23. The Annual Survey of Industries is conducted with the primary objective to provide a meaningful insight into the dynamics of change in the composition, growth and structure of various manufacturing industries in terms of output, value added, employment, capital formation and a host of other parameters. I note the following key points from the survey results. Key statistics (five-year period from FY19 to FY23) ·           Number of total factories in the country has grown at a CAGR of 1.2%, despite the government’s strong emphasis on manufacturing and multiple incentives. ·           Total fixed capital (investment) employed in manufacturing has recorded a growth of 4.4% CAGR . Total invested capital has grown at a CA...

  FY24 Real GDP growth surpassed all estimates, even the most optimistic once, by a wide margin – growing 8.2% in FY24. The forecasts for FY25 have been upgraded sharply higher. Now most professional forecasters are projecting FY25e GDP growth to be in the 6.7-7.2% range. FY24 Real GDP growth has been led by investments (+9%). Consumption growth, both public (+2.5%) and private (+4%), continues to remain poor. The share of private consumption fell to 55.8%, lowest in decades. Exports (+2.6%) growth was also one of the lowest in a decade (excluding Covid affected FY20 and FY21). On the supply side, FY24 witnessed one of the worst agricultural GVA growth (+1.4%) in a decade; whereas Industrial growth (+9.5%) led by manufacturing and construction, was extremely strong. Services growth slowed down to 7.6% from 10% in FY23. In 4QFY24 , the surprise came largely from exports (+8.1%). Government consumption (+0.9%) completely collapsed due to election related restrictions. On the...