All seems to be well or, at very least, improving. One can soak up economic headlines and analyses, including from bodies like FICCI, that despite short-term challenges India’s GDP is expected to grow around 7.5 per cent this year. This makes us the fastest growing economy on a statistical basis.

But should we rush to applaud ourselves based only on this fact? Whether these numbers are what we really merit (think: double-digit growth) or whether they sustain gainful engagement of additional manpower (think: @ one million a month) is yet to be fully deliberated.

Recent history does demonstrate that during 2003-2012, when GDP growth was 8 per cent plus, there was a massive fall in poverty. So growth and income/gainful employment do move in tandem.

Yet, one must remember that GDP captures only the formal economy (FE), while there exists a large (wholly legal) informal economy (IE) that is not measured. Therefore “real” GDP velocity is = (FE + IE). Possibly the “real” GDP growth was well in excess of 8 per cent in the said period.

However, with the informal economy having taken blows, the IE figure may now be minuscule to negative — no one really knows . Therefore, even with a 7.5 per cent formal growth, it is anybody’s guess what the true (FE + IE) figure is now. Nor is there a clear grip on employment numbers.

For every GDP forecast, there is also a clutch of economists who can flag risk factors — such as oil prices, inflation, interest rates, and global trade policies — invariably moderating a forecast rather than boost it. But let us prudently assume that the GDP forecasts are just about achievable.

But, as has been often argued, an economic growth story must look beyond just GDP numbers to justify its strength, and businesses must strategise to prosper. Without the inherent potency of businesses and other economic participants, GDP can be, in effect, a mere statistic.

We need to look beyond the growth numbers at multiple levels. Let us stick here to essentials.

At a macro level it requires incisive (as opposed to broad) evaluation to pinpoint how much of the benefit of our growth ultimately flows overseas, and how much of our growth can be traced to exports of goods and services from India. We must create mitigating strategies if needed.

It is interesting that Arvind Pangariya argues that since there is little wisdom in producing at home what we can buy abroad at lower cost, the obvious strategy should be to expand exports on a war footing (rather than try to curb/substitute imports); profitably is obviously implied.

But this is probably contrary to current trends. As our trade deficit (even non-oil) seems to be expanding, it is reasonable to hypothesise that others could be benefiting disproportionately from India’s market growth.

Even large ‘Make in India’ projects by foreign investors could at the end of the day distribute large chunks of India’s growth to foreign capacities and employees. This entire perception needs a more rigorous, open-minded study for worthwhile conclusions. The effective drivers for expanding value-adding exports are industrial cost-competitiveness and technical prowess. At the minimum, the former deserves urgent and intense policy attention.

Profits, cash flows

At a micro-level, the prime issue that businesses must focus on is whether the profits and cash flows that can be sustainably generated by them at projected growth rates are sufficient for their full debt service obligations. Where business models (start-ups, services and the like) are based on funded losses, whether they will be generating cash flows (say) in the next five years or so?

Without sustainable profits and cash flows, irrespective of nature of business, there are negative connotations for India’s economic story even if the GDP rate gallops.

India is already going through the pain of banks almost paralysed due to of insufficient cash flow generation by businesses. Based on present trends, traditional lenders will probably not majorly support funding of investments; risk-adjusted return requirements of alternative funding will be invariably higher which means businesses must be kept more profitable inherently.

Therefore, given competitive pressures and the absence of pricing freedom, demands on cost-efficiencies will be higher than ever. It is obvious that the cost structure endured by business requires a comprehensive re-look, notwithstanding any simplifications afforded by GST.

Also, despite significant and sincere efforts being made towards the ease of doing business, how to achieve globally relevant efficiencies, freedoms or time-lines in a regulation-heavy environment is altogether a separate subject.

Many of the pressure points referred to above do not — in the usual course of things — trouble the 100-200 companies at the top of the ladder.

The sound bytes and mind space occupied by these players is very high, and may sideline the issues of others. But what may be true for them is not necessarily true for the multitude of economic participants. It seems that policy-makers must urgently address lingering or future genuine pain, particularly for those down the ladder, notwithstanding the point of time we are at in the political economy.

In keeping with the need of the hour as well as the true intent of the government, one expects the solutions to not be cosmetic but substantive.

The short points being made here are: future GDP appears stable and headed upwards, which is fundamentally positive for the economic story; and a north-bound GDP is not enough to ensure either the economic narrative or the health of businesses.

The purpose here is not to be sceptical but outline the rational need for policy-makers, businesses and commentators to look beyond numbers and engage quickly, deeply and constructively.

The writer is an entrepreneur and former President of FICCI.