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Tuesday, July 16, 2024, 10:58 am

Tuesday, July 16, 2024, 10:58 am

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Positive outlook on the economy

economy
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The recent economic data may be fortuitous, but it also supports the widespread theory that the Narendra Modi administration will win a third term in government. The GDP growth numbers, GST revenues, increase in foreign currency reserves, and upbeat attitude on stock exchanges during the past several days highlight the optimistic sentiment regarding the Modi government’s performance. Notwithstanding the usual nit-pickers and professional detractors, the economy’s record 8.4% growth in the third quarter of 2023–2024 was impressive. Both the expert economists and the stock markets were pleasantly pleased. The Reserve Bank of India’s estimate of the October–December GDP growth of 6.5% was surpassed by data issued by the National Statistical Office on Thursday. The majority of analysts’ estimates were more in line with the RBI projection. The improved third-quarter results were a result of advancements in commerce, communications, real estate development, mining, manufacturing, and other sectors. Nonetheless, some analysts questioned the strong increase for the third quarter due to the significant discrepancy between the GDP and Gross Value Added in the December quarter. It is believed that GVA, or generally speaking growth less indirect taxes and subsidies on goods and services, is a more accurate measure of growth. Only the agricultural industry lagged behind the other main sectors in the December quarter, with all of them contributing to growth. In contrast to prior quarters, the December quarter saw improvements in both private consumption and investment. Sales in the auto industry increased, and record levels of automobiles were sold. The increase in coal output served as one sign of the economic recovery. In the current fiscal year, Coal India Ltd. recorded a 10.5% rise in output from April to February. (It’s no surprise that Coal India’s stock is trading at all-time highs.) According to the RBI’s most recent figures, the forex kitty saw a $2.9 billion increase in reserves for the week that concluded on February 23.
At the conclusion of the previous week, there were $616 billion in total reserves. But there were also some concerning indicators. The percentage of households saving money is still low. One main offender is the inflation of consumer prices. People also favour investing in shares and equities. preventing the government from allocating further funding for infrastructure initiatives. The financial system’s shortage of liquidity was another issue. Given that all taxpayers, corporate and individual, will need to make tax payments by the middle of March, an improvement is unlikely to occur right now. The country is benefiting from the gradual but steady shift in exports from China to India, which is a noteworthy positive development. All things considered, it is evident that the economy has overcome the post-Covid pressure. After the interregnum of the Lok Sabha vote, further impetus is likely to come.

 

 

Abhishek Verma

 

 

 

 

 


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