India’s GDP growth for Q1 FY25 (April-June) slowed to 6.7%, marking a 15-month low, largely due to reduced government spending. Recently, the Reserve Bank of India’s Governor said that the country’s growth story remains intact, backed by strong fundamentals.
Both the IMF and World Bank have revised India’s GDP projections upward to 7% earlier this month, signalling confidence in its economic potential.
But what do India’s macroeconomic indicators for the month of August say? Here is a detailed break-up:
Goods and Services Tax
The Goods and Services Tax collections stood at Rs 1.75 Lakh Crore in August 2024, compared to Rs 1.82 Lakh Crores in July.
The CGST collections rose to Rs 30,862 crore, while SGST collections increased to Rs 38,411 crore. IGST, which includes revenues from imports, surged to Rs 93,621 crore, and cess collections amounted to Rs 12,068 crore.
Inflation
The retail inflation for the month of August increased marginally to 3.65% from 3.54% in July. Rural Inflation and Urban Inflation followed suit at 4.16% and 3.14% respectively.
The consumer food price index (food inflation) stood at 5.66%, rural food inflation at 6.02% and urban food inflation at 4.99%. July’s food inflation was recorded at 5.42%.
Inflation Rates (Jan-Jun 2024)
Unemployment
In August 2024, the unemployment stood at 8.5%, a noticeable increase from 7.9% in July. However, this rise coincided with a sharp uptick in the labour participation rate, indicating that a significantly larger portion of the working-age population was actively seeking employment, according to the data by CMIE.
It’s not uncommon for the unemployment rate to climb when the number of job seekers surges within a short period, as not all of them immediately find opportunities, leaving some without employment in the interim.
Purchasing Manager’s Index (Manufacturing and Services)
In August 2024, India’s composite PMI has been recorded at 59.3, down from July’s 60.7.
This month’s manufacturing PMI stood at 57.5, down from July’s 58.1, output and sales were lowest since January. Despite the easing cost pressures, firms continued to pass on additional costs to clients, resulting in the second-fastest rate of charge inflation in nearly 11 years, stated the S&P Global report.
On a contrasting note, Services PMI increased to 60.9 in August from 60.3 in July. Finance and Insurance were the best performers of India’s service economy.
India’s Index for Industrial Production
The Index of Industrial Production (IIP) for July 2024, released in September, indicated a growth rate of 4.8 per cent year-on-year, marginally up from 4.7 per cent in June 2024.
The Quick Estimates of IIP with base 2011-12 stands at 149.6 against 142.7 in July 2023. The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of July 2024 stand at 116.0, 148.6 and 220.2 respectively.
Within the manufacturing sector, the growth rate of the top three positive contributors to the growth of IIP for the month of April 2024 are – “Manufacture of basic metals” (6.4%), “Manufacture of coke and refined petroleum products” (6.9%), and “Manufacture of electrical equipment” (28.3%).
IIP Growth Rates by Sector for August 2024
Trade Merchandise
Trade Deficit in August 2024 expanded to USD 29.7 Bn from USD 23.5 Bn in July.
India’s total exports for August 2024 amounted to USD 65.40 billion, registering a slight decline of 2.38% from USD 67.00 billion in August 2023. Meanwhile, total imports stood at USD 80.06 billion, reflecting a 3.45% rise from USD 77.39 billion.
The merchandise exports fell to USD 34.71 billion in August 2024, a decline from USD 38.28 billion in August 2023 whereas Merchandise imports rose to USD 64.36 billion, up from USD 62.30 billion in August 2023.
For services, exports were estimated at USD 30.69 billion, a 6.90% rise from USD 28.71 billion in August 2023 imports were estimated at USD 15.70 billion, showing a modest increase from USD 15.09 billion. The services trade surplus reached USD 14.99 billion in August 2024.
FII and DII Statistics
Foreign Portfolio Investors (FPIs) infused Rs 7,320 crore into Indian equities in August 2024, while total net investments across debt, hybrid instruments, debt-VRR, and equities reached Rs 25,493 crore, as per National Securities Depository Ltd (NSDL) data.
Conversely, domestic institutional investors (DIIs) reported net investments of Rs. 28,633.15 crore. The equity markets ended the month with the NSE Nifty 50 and the BSE Sensex closing at 25,235.90 and 82,365.77, respectively.
UPI Transactions
The Unified Payments Interface (UPI) saw an uptick in August 2024, with 608 banks participating, compared to 605 in July 2024. The volume of transactions reached 14,963.05 million, and the value hit Rs. 20,60,735.57 crore.
UPI Transactions (August 2024)
