In a research report titled 'India: Data in disguise' released on 3 August, HSBC said that a low base could overstate India's GDP growth for Q1 FY 24.

"In such a scenario, looking at a host of other activity data may do a better job in gauging the actual growth-on-the-ground," it said.

The report said that the government's tax revenue growth may not always give a good indication of overall economic growth.

"Rather, the split may give a better read on how different sectors are faring. In June, GST tax and income tax revenue growth was strong, but corporate tax growth was weak," the report said.

"We believe this is reflective of a k-shaped recovery - stronger demand for luxury goods where prices and tax rates are higher driving GST, and improved formal sector prospects driving income tax," it added

India's Q1FY24 GDP growth is expected to clock 7.9%, according to the Reserve Bank of India (RBI).

As compared to its peers, India's GDP growth in Q4 FY23 remains ahead of most major and large economies.

"On the corporate tax front, even as profit margins improved, volume growth in the rural sector was weak, likely leading to the negative y-o-y growth," the report said.

This rural-urban discrepancy is worth monitoring carefully in an El Niño year," it added.

The report further said that while core inflation is softening, housing inflation may not be capturing the true price pressures.

"While housing rents are rising 11-22%, the CPI housing inflation remains contained at 4.8% y-o-y," it said.

"We believe this has much to do with computational issues across the board - inflation in rented houses, owner-occupied houses, and government dwellings," it added.