Latest news with #GrossValueAdded
New Indian Express
25-05-2025
- Business
- New Indian Express
Wage share dips as profit share rises in India's GVA: NAS data
NEW DELHI: New estimates from the National Accounts of Statistics (NAS) show a slight increase in workers' compensation as a share of Gross Value Added (GVA), but a sharper and more sustained rise in profits over the past five years. GVA is calculated by adding compensation to employees, consumption of fixed capital, and operating surplus/mixed income, and then subtracting production taxes and adding subsidies. Among these, the operating surplus—essentially business profits—has grown significantly across most key sectors, including agriculture, mining, electricity, transport, and financial services. This rise in profits, however, has not translated into a consistent rise in wages. Nationally, the share of employee compensation in GVA dropped from 53.5% in 2019–20 to 51.85% in 2023–24. While compensation remained around one-third of GVA overall, it actually fell between 2022–23 and 2023–24. The biggest drop in wage share was seen in the electricity, gas, and water supply sector, followed by mining and quarrying. On the other hand, the real estate sector saw a small rise in compensation share, but the construction sector experienced a notable decline. This trend points to a shrinking wage bill alongside rising profits—raising concerns over growing inequality and weakening consumer demand. Economists often caution that such patterns, while possibly beneficial for short-term investment and inflation control, can reduce job creation and hurt overall employment growth. Adding to these concerns, the Centre for Monitoring Indian Economy (CMIE), an independent data agency, recently reported a dip in consumer sentiment, suggesting a potential slowdown in demand.
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Business Standard
22-05-2025
- Business
- Business Standard
Foreign tourist arrivals strongly correlated with travel search: RBI report
There is a strong association between foreign tourist arrivals (FTAs) and their travel search volume index to India as inbound tourism is emerging as one of the key economic growth drivers, according to a report in the Reserve Bank of India' s (RBI's) monthly bulletin for May. Visits by foreign tourists, which dropped due to Covid-19 restrictions in March 2020, saw a revival in November 2021. There has been a significant increase in foreign tourists coming to India in 2023 due to the G20 Summit, meetings, incentives, conferences, and exhibitions (MICE) events, leisure trips, and the return of business travellers. The ICC Cricket World Cup also boosted India's tourism. There was also a surge in tourism in the first half of 2024. According to the research paper, travel and tourism created 76.17 million jobs in 2022-23, which is 12.57 per cent of total jobs created during the same period. Also, the foreign exchange earnings from the tourism industry for 2023 reached ₹2.32 trillion, marking an increase of over 66 per cent compared to 2022. 'There is a significant correlation between FTA and GVA-THTCB (GVA - Trade, Hotels, Transport, Communication and Services related to Broadcasting) for Q4FY21 to Q4FY24 (0.71), which supports the earlier argument that FTAs contribute directly and indirectly to GVA (Gross Value Added),' the research paper said. The views in the report are that of the authors and not of the central bank. 'Empirical results show a strong correlation between FTA for the current month and travel search volume index for preceding five months,' the paper added.
