Dear Readers,

If you are observing the Indian economy from a distance, something doesn’t add up.

On the one hand, official data show that India’s “real” GDP growth — that is, after removing the effect of inflation — has been surprising on the upside more often than not.

The GDP is essentially the overall size of the Indian economy and is calculated by adding all the different types of expenditures by different entities in the country (individuals and companies, and governments, all).

The GDP growth rate of 7.8% in the first quarter or Q1 (April, May and June) is a good case in point. It surprised everyone, including the policymakers, such as the RBI Governor, who said as much while announcing the latest monetary policy statement on Wednesday. To be sure, the 7.8% GDP growth in Q1 (da

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