High profits and low consumption.

"India's economy expanded 7.6% in the September quarter from a year earlier, exceeding expectations as manufacturing posted strong growth and investments gathered pace." ET. "The investment rate at 30%, measured in nominal terms, was the highest for the second quarter since FY15." "Private consumption grew a muted 3.1%, halving from 6% in the previous quarter." "The farm sector grew a modest 1.2%," but manufacturing grew by 13.9% "as company profits grew on the back of strong demand and drop in input costs." If private consumption grew by only 3.1%, why did manufacturing grow "on the back of strong demand"? Mystery. In accordance with the Laffer curve, direct tax collections have risen to 6.1% of GDP as a consequence of a reduction in corporate tax rates in 2019 and indirect tax collections have risen to 5% of GDP because of the introduction of GST, a proof of the "sagacious policy" of this government, gushed economist Krishnamurthy Subramanian. Goods and Services Tax (GST) collection jumped by 13% Y-o-Y to Rs 1,72 trillion, the second highest ever. ET. Gross direct tax collection increased by 17.95% to Rs 11.07 trillion, while direct tax collection net of refund jumped even higher by 21.82% to Rs 9.57 trillion till 9 October 2023. pib.com.gov. While the government's "sagacious policy" deserves applause, rising GST collections could be partly due to the consumer price index (CPI) rising by 7.4% in July, 6.8% in August, 5.0% in August and 4.9% in September. RI. The higher the prices, the higher the corporate profits and higher direct and indirect tax collections. "India Inc delivered strong double-digit growth in net profit in the September quarter, riding a stellar show by automobiles, banking and finance, cement and metal companies with a domestic focus. Revenue expanded in single digits as consumer goods companies faced volume pressure and IT companies continued to struggle for growth." ET. If the GDP has soared by an unexpected 7.6% in the second quarter, why did "The Cabinet led by Prime Minister has decided that the Central government will provide free food grains to about 81.35 crore (813.5 million) beneficiaries under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) for a period of five years from 1st January 2024." pib.com.gov. "This October, leading up to the festive season, India's gold imports amounted to $7.2 billion, against an average of $3 billion in the preceding 12 months." Mint. "Most economists view Indians' faith in gold as an irrational and regressive remnant of a medieval past. India's officialdom tends to join them in such condemnation," but "Sane and Singh's research suggests that high inflation , a currency depreciation bias, and limited avenues for asset diversification make gold a 'rational' investment for Indian households," wrote Pramit Bhattacharya. High prices lead to higher profits and tax collections. Also to gold purchase and free food grains.