New Delhi, May 30 -- At 7.4%, GDP growth in the quarter ended March exceeded expectations by a decent margin, but economic activity has seen only a marginal uptick during the period. The reason: much lower GVA growth of 6.8% in Q4, thanks to the statistical effect played by the government's subsidies.







GDP is calculated by adding net tax (taxes minus subsidies) to GVA. While GDP growth has exceeded market expectations (Mint poll: 6.9%), it has received a push from lower subsidy transfers compared to last year. This is not the first time this trend has emerged. In fact, for most of FY24, lower year-on-year subsidies had kept GDP growth above GVA growth.

In January-March 2025, the government's major subsidies had declined 40.7% compa...