Tribune News Service
New Delhi, August 30
The Indian economy is expected to register a growth rate in double digits when the government releases the figures for the first quarter (April to June) of the current fiscal on Wednesday.
Analysts are quoting figures between 12 and 16 per cent but few are optimistic of the first quarter GDP growth touching 16.2 per cent as anticipated by the Reserve Bank of India.
A base effect of 20.1 per cent growth in the same period last year, moderation of imported fuel and commodity prices and a pickup in service sector activity are the factors for Q 1 results touching double digit.
The RBI’s recent report and country reports by IMF and ADB have pointed at a mixed performance by the high frequency indicators.
Investment demand has benefited from the massive increase of 54 per cent in the central government’s capital outlay, but business investment remains tepid in spite of strong sales growth and increase in profits.
The central government’s capital outlay grew by 53.5 per cent during April-June 2022-23 while revenue expenditure increased by 8.8 per cent, leading to a marked improvement in the quality of spending. GST collections (Centre plus states) stood at Rs. 1.49 lakh crore in July 2022, the second highest since its inception and the fifth consecutive month for which GST collections have surpassed Rs 1.4 lakh crore.
Although exports moderated in July, this may be a one-off because world trade volume has accelerated. Early corporate earnings results for the first quarter of 2022-23 have beaten expectations, allaying concerns on corporate profitability in an operating environment marked by inflationary pressures.
Sales growth of non-financial sector companies remained in high double digits even after adjusting for inflation.
The global composite purchasing managers’ index (PMI) decreased to 50.8 in July, the lowest in two years, even as the services sector business activity index fell to 51.1 in July from 53.9 in June.
In all, the RBI’s economic activity index that employs a dynamic factor model (DFM) with 15 high frequency indicators showed a moderate but steady improvement in May and June.
But the uneven spread of the monsoon also impacted tractor sales in July, even as two wheelers and motorcycle sales picked up and three-wheeler sales continued to lag below pre-pandemic levels.
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