Source: The Hindu
Real growth in Q2 (July - Sept. 2023) was 7.6% as measured from Q2 (July - Sept. 2022). In the post Covid period Govt. spent a lot on infrastructure and other welfare measures which has resulted in 'Crowding in' of private sector as this higher than expected Q2 growth is driven by investment.
Govt. has been able to spend more and crowd in private sector through increased borrowing and higher tax resources.
Tax buoyancy = % change in tax revenue divided by % change in nominal GDP = 16.3%/8.6% = 1.9
When we calculate Nominal GDP, it takes into account of both real GDP and inflation. And this inflation is combined effect of CPI and WPI. CPI is 5-6% but WPI is in negative.
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