GDP surged over 8% in Dec quarter on account of fall in subsidies: FinMin official

NEW DELHI: India’s economic growth surged significantly to 8.4% in the October-December quarter, mainly on account of a massive drop in subsidies payout due to fall in prices, a top Finance Ministry official said.

“The visible gap between GDP and GVA (gross value added) growth rates, with GVA expanding by 6.5% and GDP growing by 8.4% can be attributed to fall in subsidies due to lower prices,” the official stated. GVA is a measure of the value of goods and services produced in an economy, industry, or sector. It provides a more accurate picture of an economy’s performance by excluding indirect taxes and subsidies, focusing solely on the value generated through production processes. GVA is often used by experts to assess the contribution of individual sectors or industries to the overall economy.

According to the government data, fertiliser subsidies in the October-December quarter fell nearly 70% to Rs 30,700 lakh crore as compared with the same period of last year.

In addition, the government official also informed that the Centre would stick to the fiscal deficit target of 5.8% set for the current fiscal year 2023-24, despite the dynamic growth figures in the final quarter of 2023. “We hope to stick to the 5.8 per cent fiscal deficit target in the current financial year. I don’t think that GDP numbers released on Thursday will lead to any change in the deficit target,” the official cited above said.