GDP correlation has gone for toss in current year not very sure how GDP numbers are coming Says Asian Paints Amit Syngle

GDP Data: The GDP growth data for the fourth quarter of the financial year 2023-24 and the entire financial year will be announced on May 31, 2024. But the Statistics Ministry has estimated 7.6 percent GDP growth rate in 2023-24. In the first three quarters of the financial year, the Indian economy has grown at a rate of more than 8 percent. From the government to this GDP figure, rating agencies and experts on economic matters around the world are patting India on the back. But Amit Syngle, MD and CEO of the country's leading paint company Asian Paints, is expressing surprise about the country's GDP figures. He said, be it steel or cement or any other sector, the growth of these sectors is not matching with the GDP growth rate.

Does not match with GDP growth

An investors conference was organized on 9 May 2024 to discuss the business and financial performance of Asian Paints. The top management of Asian Paints was present in this conference in which MD and CEO Amit Singal was also present. In the conference, Avi Mehta of Macquarie asked Amit Singal, we have always seen the paint industry linked with the growth of GDP. He said that we consider Asian Paints as the benchmark of the industry. And when we look at the company in terms of value growth in the current financial year (2023-24), it is not matching. He asked Amit Singal the reason for this and wanted to know how it would be rectified.

Question on GDP figures

In response to this question, Amit Singal told investors, you are right that the GDP relationship has gone haywire in the current financial year. He said, I don't know how this GDP figure is coming. He told the investment bankers, you are knowledgeable about statistics and you can explain better. He said that this difference is being seen in different sectors. He asked whether the GDP we are talking about is actually matching? If you look at the growth of core sectors like steel, cement and other sectors, it does not match with the GDP we are talking about. He said that we need to find out realistically that if we are talking about 7 percent growth rate, then whether any sectors are also growing at 5 percent or 4 percent or not?

At some places development is fast and at other places it is slow.

Amit Singal said that we need to think about whether GDP should be applicable for any particular sector. He said, changes are being seen in GDP in different areas. The pace of development is fast in certain areas but some areas are developing at a slow pace. But when we get the complete GDP number then it will be called complete. Something needs to be done for this.

Questions have been raised earlier also

This is not the first time that questions have been raised on GDP figures. In the financial year 2023-24, uneven rainfall was seen in many states of the country. Demand and consumption is still low in rural areas. From FMCG to consumer durables and two wheeler companies themselves have been confirming this. Despite this, experts have been expressing surprise at the GDP figures for the three quarters of 2023-24. If we look at the results of Asian Paints itself, in the fourth quarter of the financial year 2023-24, the company's revenue declined by 0.6 percent to Rs 8730.8 crore, while the profit saw a rise of only 1.3 percent.

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