In this State of the Economy podcast, businessline’s Shishir Sinha speaks to Devendra Kumar Pant, Chief Economist, India Ratings and Research, about the impact of heatwave and elections on the High Frequency Indicators. 

The podcast initially focuses on GST collections surpassing 2 trillion for the first time and a dip in the Purchasing Managers’ Index (PMI) for the manufacturing sector. This could be due to seasonality or because manufacturers are waiting to make investment decisions until the new government is formed after the elections. The discussion emphasises the complexity of interpreting these figures amidst a dynamic economic landscape, noting improvements in compliance and leakages in the GST system 

Elections’ potential impact on economic activity is debated, with skepticism about a significant boost in demand. Heat waves and monsoon variations are predicted to affect sectors like travel and agriculture, albeit with some mitigating factors such as increased agricultural efficiency and government food distribution.  

Expectations for April’s retail inflation hover around 4.75%, with minimal decline anticipated. This is because the government is supplying food grains at subsidized rates. However, there could be some upward pressure due to vegetable inflation. Regarding interest rates, the consensus is that with consistent economic growth at 7.6%, any rate cuts by the RBI would be nominal.  

The conversation touches on revised growth forecasts, highlighting the unexpected strength of India’s economy and the role of factors like tax policies and monsoon patterns. The speaker suggests awaiting further data post-elections for a clearer picture, signaling a cautious approach to economic projections amidst uncertainties.

 (Host: Shishir Sinha, Producer: Anjana PV)