Neutral means less for us

"India's Gross Domestic Product (GDP) surged to a four-quarter high of 7.8 percent on an annual basis in the June quarter of FY24, in-line with the expectations, data released by the National Statistical Office (NSO) showed." ET. "The nominal GDP or GDP at Current Prices in the quarter registered a growth of 8.0 percent." "Economic growth during April to June has been good since 2021 - primarily because of the base effect. In Q1 2019-20 - before the pandemic - the GDP had stood at Rs 35.6 trillion. This contracted by a little over 23% in April-June 2020 to Rs 27.2 trillion due to the pandemic induced lockdown," wrote Vivek Kaul. In April-June 2023 it has grown to Rs 40.4 trillion. "Real GDP, which is adjusted for inflation, has grown 3.2% per year in the first quarter from 2019-20 to 2023-24." Till June 2023, India's GDP was $3,737 billion which translates to a nominal per capita GDP of $2601. Per capita GDP was $2,050 in 2019. Forbes. This means a growth of 26.83% since 2019. "With a nominal GDP growth of 8% and real growth of 7.8%, the nominal growth component of 0.2 percentage points in the June quarter is the second lowest in the current series in absolute terms," wrote Roshan Kishore. This was because of negative wholesale inflation due to falling commodity prices, but "could generate headwinds for revenue collection, limiting the government's ability to spend closer to the elections without breaching the already high fiscal deficit levels." "India's goods and services tax collections grew to Rs 1.59 lakh crore (Rs 1.59 trillion) in August, up 11 percent on a year-on-year basis, the Finance Ministry said." ET. The higher the prices the higher the tax collected. This may be why inflation never seems to come down in India. Even so, they are not pleased. "Economic Advisory Council to the Prime Minister (EAC-PM) Chairman Bibek Debroy recently said the government was losing revenue due to the GST, which should be revenue neutral with a single rate." What does "revenue neutral" mean? The government is collecting trillions in taxes from citizens, which are increasing by double digits, thus reducing money in our wallets and our spending power. Decreasing wealth, not neutral, for us. First in 2008 and then during Covid, "The (US) Fed drove down interest rates by printing money - or rather creating it digitally - and using it to buy bonds," wrote Vivek Kaul. In addition, the US government handed out cash to all income tax filers - $1,200 per adult and $600 per child in March 2020, $600 per adult and $600 per child in December 2020 and $1,400 per adult and $1,400 per child in March 2021. Pandemic Oversight. Now the Fed is shrinking its balance sheet and has raised its Funds rate to 5.25% to reduce investment and consumer spending, to bring inflation down. Though inflation in July fell to 3.2% year-on-year, Fed Chair Jerome Powell said that the Fed may increase interest rate further and keep it higher for a longer period. BBC. US consumer spending increased by 0.8% in July and claims for unemployment benefits fell by 4,000. ET. US consumers have cash to spend. Indians have very little. Leave more money with us. Better not to be neutral.