India’s economy kept humming in August even though at a slower pace than July, according to high frequency data released on September 1 and 2.
While GST collections at Rs 1.75 lakh crore in August remained above Rs 1.7 lakh crore for a sixth month in a row, they were still lower than the previous month’s collection of Rs 1.82 lakh crore.
The pace of collection, however, remained largely unchanged at 10 percent higher than the previous year.
“Despite a decline in net GST revenue due to increased refunds, the continued growth in gross GST collections indicates a robust economy. The shift towards self-reliance is evident in the decreased imports and increased exports,” said Saurabh Agarwal, Tax Partner, EY.
A slowdown was also evident in manufacturing activity, which eased to 57.5 in August, declining for the second consecutive month, according to data released on August 2.
The firms surveyed for the Purchasing Mangers’ Index noted increased competition hampering growth for the second month.
“The Indian manufacturing sector continued to expand in August, although the pace of expansion moderated slightly,” said Pranjul Bhandari, chief India economist, HSBC.
UPI data showed a similar trend, reporting yet another month of Rs 20 lakh crore plus transaction volume, even as the pace tapered off slightly from the previous month.
FASTag transaction volumes were also from the previous month at 329 million compared with 323 million in July but tapered in growth to 7 percent from 9 percent in the previous month.
Auto sales also remained tepid with big manufacturers indicating a decline in sales for the second straight month. Maruti witnessed an 8.4 percent decline in domestic sales, while Hyundai and Tata witnessed an 8 percent and 3 percent decline, respectively.
But two-wheeler demand seems to be picking up. Bajaj witnessed a 30 percent jump in two-wheeler sales, while Hero Motocorp recorded a 4 percent rise in sales and TVS Motor Company’s sales were 14 percent higher.
Consumption was one of the bright spots even as growth dipped to 6.7 percent in the first quarter compared with 7.8 percent in Q4FY24 and 8.2 percent in the previous year.
Private final consumption expenditure was 7.4 percent up in Q1FY25 compared with 4 percent in the previous quarter and 5.5 percent in the first quarter of FY24.
Domestic air traffic was up 7 percent in July 2024, while freight traffic also increased 4.7 percent.
Coal India’s production was down 11.9 percent in August at 46.1 million tonnes from 52.3 million tonnes. Overall coal production was down 8 percent in August even as cumulative coal production till August was up 6.5 percent from the previous year.
The other push came from investment, which was up 7.5 percent in the April-June period, rising from 6.5 percent in the January-March quarter.
Core industries output rebounded in July with a 6.1 percent growth, rising from eight month low of 5.1 percent in July.
The economy is likely to expand over 7 percent in the second quarter of the year. Return of capex—government capex spend was up 107 percent in July—along with better monsoon is likely to give fillip.
Manufacturers are upbeat about sales in the upcoming festive season as well.
RBI Governor Shaktikanta Das, on August 31, said that he was confident that RBI’s 7.2 percent growth projection for FY25 would materialise.
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