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Travel data shows India’s economic recovery has legs; indeed, even wings | Mint – Mint

  • Hotel booking and flight search data, taken alongside anecdotal evidence on the visa application rush, suggests the official statistics might not be capturing the full extent of the revival.

It is a welc​​ome development when the dry numbers of the National Statistical Office get confirmation from industry figures closer to the human activity that underpins growth statistics. Especially when the activity in question is associated with fun and enjoyment.
When hospitality grows, it suggests an increase in human happiness and thriving business. A Mint news report published today indicates that Indians are flying more to holiday destinations, booking themselves into hotels and inns, and, as others elsewhere suggest, buying quality luggage in growing numbers.
The NSO’s advance estimates for GDP of the current year show that the economy achieved a growth rate of 7%, primarily on the strength of services, which grew at a rate of 9.1%, faster than in recent years, even as agriculture grew at an annual rate of 3.5%, and industry huffed up a growth rate of 4.1%, faster than the 3% average for the past five years for the sector.
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But the star growth performer has been the sector dubbed trade, hotels, transport, communications, and services related to broadcasting, which grew 13.7% in real terms, on top of 11.1% growth in the previous fiscal.
The Mint report, quoting hotel reservation makers, suggests that the growth is being sustained in January, well after the New Year bout of partying and spilling over into the Republic Day weekend. Bookings continue to be robust for holiday destination stays.
Samsonite, the world’s largest maker of luggage, has said that India has outpaced China to become its second biggest market.
In fact, the hotel booking and flight search data, taken alongside anecdotal evidence on the visa application rush at American and European consular offices and long delays in visa application processing, suggests that the official statistics might not be capturing the full extent of the revival in the travel industry.
This should not be surprising. The base year for GDP estimates is 2011-12, which is now 11 years old. In the past one decade, the nature of the economy has changed drastically in some sectors, even if progress has been reluctant in others. India has seen an explosive growth of unicorns and other, less mythical, startups. Social media influencers have emerged as a new category of income earners, with associated broadcast activity, a lot of it performed on a smartphone, that might not be captured in the traditional accounting of broadcast-related services.
The entire growth of wireless broadband, which has made India one of the biggest consumers of data in the world, has seen a proliferation of services, for which the data-capture systems of 2011-12 vintage are just not geared. The proliferation of streamed content, with the option to have subtitles in multiple languages, generates demand for writers, translators, content producers and technicians on an unprecedented scale. Their incomes are likely to be captured more in indirect indicators such as the growth of craft breweries, the launch in India of several high-value, high-quality alcoholic beverages and, in general, the demand for hospitality and travel.
Congestion in Delhi and Mumbai airports is torment for travellers, no doubt. But those milling crowds at airport terminals tell a story of sustained travel demand that goes beyond seasonal spikes in demand, related to holidays or weddings. A report, also in Mint, says that average room tariffs are 50-100% higher than in pre-pandemic levels. This cannot happen if the economy is merely limping along.
The government should get down to the business of overhauling its data machinery. A fast-growing economy like India’s in a fast-changing world calls for frequent changes in the way economic activity is captured and recorded. We should not have to wait for a decade and more to bring about changes.
In the meantime, it is safe to conclude that India’s economic recovery has legs; indeed, even wings.
Elsewhere in Mint
In Opinion, Rahul Jacob says forecasts of China’s manufacturing fall are foolhardy. Manish Sabharwal & Sunil Chemmankotil write on the software sector’s Antyodaya approach. Parmy Olson says Facebook’s Zuckerberg could soon face the threat of prison. Long Story narrates the breakdown of Auto Expo.
 
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