When indicators are contradictory.

India's GDP growth slipped to 6.6% in the third quarter, from September to December 2018. After growing at a blistering 8.2% in the first quarter, from April to June, growth slowed to 7.1% in the second, although figures have been revised slightly downwards. But, there is a problem with the measurement of GDP, wrote I Rajaraman. While previous figures were trustworthy, "Some years ago, a new series of GDP was issued with base year 2011-12, with a substantially altered method of estimation." Back series calculation should not be a problem, "But the new series continues to pose a problem because of the constant revisions being done within its period of coverage." Manufacturing rose by 1.5% in last three years to 18% of GDP. It was 16.8% of GDP in 2015-16 and 2016-17 and fell to 16.7% in 2017-18. Since manufacturing creates jobs the government wants to increase it to 25% of GDP by 2022 and create 100 million new jobs. But "investors complain that higher taxes, lack of efficient infrastructure and regulatory red tape make India a difficult place to work". However, Purchasing Managers' Index (PMI) for manufacturing rose to 54.3 in February from 53.9 in January, the highest in 14 months. It was boosted mainly due to "strong inflows of new business, technological progress, beneficial public policies and positive market conditions". A Mint Macro Tracker for January showed that 4 out of 16 indicators are in the green, while 8 are in the red, compared to 6 months ago, wrote N Kwatra. "The domestic consumer economy remains the weakest spot, with automobile sales falling, air passenger traffic sluggish, and tractor sales anemic." The Reserve Bank (RBI) may need to cut its policy rate by a hefty amount because "growth in private final consumption expenditure has slowed to 8.4% from 10% the previous quarter," wrote A Iyer. Mainly because of a fall in rural spending caused by a collapse in rural incomes due to a prolonged deflation in prices of farm produce. "What seems to have pulled down GDP is government final consumption expenditure, which was just 9.7% of GDP, compared to 11.9% of GDP in the September quarter. Indeed, the government has tightened its purses to meet fiscal deficit targets." Fiscal deficit is already 121.5% of the target for the full financial year, ending on 31 March. This, despite a revised higher target of Rs 6.34 trillion set in January. Though manufacturing remains strong the slowdown in the services sector, which contributes over 50% of GDP, is impacting economic growth, wrote A Nag. GST collections dropped to Rs 972.47 billion in February which is being blamed on lower tax rates. Lower rates should increase private consumption but will reduce government expenditure. Seems to be a Gordian Knot. Best to massage GDP figures.