The Mahakumbh is expected to boost India's economic growth in the fourth quarter, Chief Economic Adviser V Anantha Nageswaran said Friday, citing increased spending on travel, consumption, and hospitality.
Spending in January and February related to the Mahakumbh is expected to add significantly to nominal GDP, he said, pointing to a surge in travel, consumer spending, and hospitality during the event.
With an estimated 50-60 crore people travelling for the Mahakumbh, “it will have a sizeable impact on the consumption expenditure data in Q4,” he said.
His comments came after government data showed India's gross domestic product grew 6.2% in the October-December quarter, following 6.5% and 5.6% growth in the first two quarters of the fiscal respectively. Full-year GDP is projected to grow 6.5% as per the second advance estimates.
Nageswaran said the GDP estimate is supported by rising merchandise exports, higher public capital spending, and the economic impact of the Mahakumbh, a major religious gathering.
Nageswaran added that the implied fourth-quarter growth rate appears reasonable based on purchasing managers' index data and other high-frequency indicators. Digital transactions are rising, hotel occupancy rates have returned to usual levels, and port traffic and air cargo data suggest strong domestic and international activity, he said.
While domestic rural demand continues to improve, urban demand too is showing signs of a pick-up, he said. For the full year, adjusting the advance estimates for the average exchange rate so far, nominal GDP for fiscal 2025 translates into $3.924 trillion, which is close to the $4-trillion mark, he said.
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