Data recap: Inflation, tax mop-up, India-UAE ties
News and developments from the week gone by, through numbers and charts
Every Friday, Plain Facts publishes a compilation of data-based insights, complete with easy-to-read charts, to help you delve deeper into the stories reported by Mint in the week gone by. The consumer price index (CPI)-based inflation cooled to 5.1% in January, but still remains above the Reserve Bank of India’s (RBI’s) target of 4%. India and the United Arab Emirates concluded a bilateral agreement and signed a framework for the India-Middle East Economic Corridor during Prime Minister Narendra Modi's two-day visit to the nation.
Diplomatic win
Ahead of Modi’s visit to West Asia this week, the release of eight imprisoned ex-Indian Navy personnel from Qatar marked a notable triumph for New Delhi’s diplomatic efforts. The strengthening of relations with the region in recent years has led to increased trade, with key Gulf nations now constituting over 14% of India's trade and hosting more than 25% of its expatriates, a Mint analysis showed. During his visit, Modi inaugurated the first Hindu temple in Abu Dhabi and signed a framework agreement on the India-Middle East Economic Corridor.
Inflation cools
India's retail inflation eased to a three-month low of 5.1% in January from 5.7% in the previous month, data released by the government showed. Although headline inflation remained above the RBI's medium-term target of 4%, core inflation, which excludes food and fuel, stayed below that mark for the second month in a row. However, the food and beverages group experienced elevated inflation, while the fuel and light index decreased by 0.6%. Vegetable prices remained high, driven by essentials like garlic and tomatoes, putting pressure on household budgets.
Job trends
6.5%: That's the unemployment rate in urban areas in the December 2023 quarter, data released by the ministry of statistics and programme implementation (MoSPI) showed. In the same period last year, India's unemployment rate was 7.2%. The Periodic Labour Force Survey showed that the urban labour force participation rate—or the share of individuals in the labour force—rose to 49.9% from 48.2% a year ago. The survey was conducted among a sample of about 169,000 people across 44,544 urban households across the country.
Expanding kitty
The Centre’s net direct tax collections, after adjusting for refunds, increased by 20.3% on year to ₹15.6 trillion in 2023-24 till 10 February. The figure already represents 80% of the revised budget estimate for the full fiscal year. This growth was primarily driven by a 27% increase in personal income tax payments, while corporate income tax also saw a rise of 13.6%. Direct tax collections as a percentage of GDP for 2023-24 is projected to be 6.6%, markedly higher than the 6.1% in 2022-23.
Paytm saga
The RBI's crackdown on Paytm Payments Bank has adversely affected small investors. The shares of its parent company, One97 Communications, have plummeted following the central bank's suspension of most of the bank's operations due to repeated non-compliance with regulations. Retail investors had significantly increased their stake in Paytm during the December quarter, from 8.28% to 12.85%, Mint reported. The decline in share prices comes as an unpleasant surprise for both new and existing investors.
Ministry spends
68%: That's the percentage of the full-year budgetary allocation used up by Union ministries in the first nine months of the financial year 2023-24. In a statement, the ministry of finance said the actual total expenditure by 56 ministries during April-December was ₹30.4 trillion, against the revised allocation of ₹44.9 trillion for 12 months. Among those with large allocations, the railways, road transport and highways ministries utilized up to 85% of their allocations, and the defence ministry about 71%.
Edtech’s woes
The once-promising edtech space seems to be losing the plot given the unending funding winter for startups. Besides, the operational hurdles faced by Byju's, once hailed as a leading player in the sector, has also dampened sentiment. The industry had received widespread recognition during the pandemic, attracting investments worth $4.1 billion in 2021, double of what it received in 2020. However, investments plunged over 90% in the post-pandemic period. The sector had a nearly 42% share in all startup layoffs in India since 2022, as recorded by a tracker run by Inc42.
Chart of the week: People’s choice
With the Lok Sabha elections just weeks away, the Bharatiya Janata Party (BJP) is in a pole position with the possibility of a record third term. Nearly every second urban Indian (47%) identifies with the ruling party, shows the latest round of YouGov-Mint-CPR Millennial Survey.
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