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In this episode of ‘State of Economy’, businesslines’s Shishir Sinha speaks to Rishi Shah, Partner and Senior Economist, Grant Thornton, to discuss the latest high-frequency economic indicators released over the past week.
The conversation starts with an analysis of GDP numbers for FY24 and Q4 FY24, which have surpassed expectations. Rishi discusses the strengths in manufacturing and services sectors while addressing concerns about data discrepancies, particularly the gap between Gross Value Added (GVA) and GDP.
Regarding mixed signals in consumption patterns, Rishi mentions that while high-end consumption is on the rise, overall consumption remains subdued. The decline in entry-level vehicle sales and the increase in higher-end vehicle sales indicate income transitions.
Examination of the revised fiscal deficit estimate for FY24 at 5.63%, down from 5.8%, and the FY25 budget estimate of 5.1%. Rishi emphasises the need for continued government spending on public welfare and infrastructure, despite potential surplus transfers from the RBI and profits from public sector banks (PSBs) and central public sector enterprises (CPSEs).
Rishi talks about the May GST collection of ₹1.73 lakh crore, following a record high in April. The conversation later shift to whether this reflects increased pricing or a shift towards higher-end consumption rather than broad-based consumption growth.
Interpretation of the PMI manufacturing figure, shows a slight dip to 57.5 but remains in expansion territory. Rishi explains why, despite the downtick, it indicates positive manufacturing activity.
Predictions for retail inflation, expected to stay around 5%, influenced by core inflation trends and volatile food prices. Rishi anticipates some volatility in food prices due to seasonal factors, impacting the overall inflation trend.
Listen in.
Host: Shishir Sinha; Producer: Renil S Varghese
About the State of the Economy podcast
India’s economy has been hailed as a bright spot amid the general gloom that seems to have enveloped the rest of the world. But several sectors continue to stutter even as others seem set to fire on all cylinders. To help you make sense of the bundle of contradictions that the country is, businessline brings you podcasts with experts ranging from finance and marketing to technology and start-ups.
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