Theme: Macroeconomy | Is India’s consumption growth back on track?

In this episode of State of Economy podcast, Shishir Sinha speaks with DK Srivastava, Chief Policy Advisor at EY India, on the latest high-frequency economic indicators and their implications for India’s growth. They dive into the recently released GST collection numbers, which reveal a seasonal pattern of spikes, especially driven by rural demand. As Srivastava explains, “Subject to some adjustment or the seasonality pattern, consumption expenditure appears to be picking up on average and is being driven largely by rural demand.” He emphasizes that while consumption shows signs of recovery, it’s essential to consider the seasonal fluctuations when interpreting these figures. Srivastava notes, “Both considered together, there may be some overachievement of the fiscal deficit target. However, it comes at the cost of sacrificing some growth.” He highlights the expected shortfall in government capital expenditure and the potential consequences for the overall economy. On inflation, Srivastava shares an optimistic view, stating, “So I see the CPI inflation as a positive movement which is preparing ground for interest rate reduction.” Listen in to this podcast for a detailed analysis of how India’s economy is performing across key indicators and what these trends mean for future growth. (Host: Shishir Sinha; Producers: Renil S Varghese, Siddharth Mathew Cherian)