-Samriddhi Singh Mahar & Suhani Prakash
In October 2024, India’s economy showed mixed performance across key macroeconomic indicators.
GST revenue increased significantly and the tax revenue stood at Rs 1.87 Lakh Crore, highest GST revenue recorded since April, with a 7.9% y-o-y growth.
UPI transactions continued to grow, reaching new heights with 16,584.97 million in volume.
However, unemployment spiked to 10.1%, driven by rural areas. Inflation rose slightly, while industrial production and PMI signalled growth. Merchandise exports saw significant growth, though trade deficits widened.
As per RBI Deputy Governor Michael Patra’s speech at the at the New York Fed Central Banking Seminar and a Moody’s report, India’s expected GDP projection is to be 7.2% for FY25 while keeping a buoyant Q3 and Q4 growth in mind, FY25 GDP could inch closer to 7%, according to an SBI report.
Overall, October witnessed a mixed development in the economy with some sectors performing well whereas some sectors still facing challenges and resistance in growth.
While going through these fluctuations in the economy of India, these is what the macroeconomic indicators for the month of October 2024 reveal:
Goods and Services Tax:
The goods and services tax revenue stood at Rs 1.87 Lakh Crore for October 2024, which is a sharp spike from the Rs 1.73 Lakh Crore collection in September 2024. The GST revenue observed a y-o-y growth of 7.9% for October 2024.
Maharashtra has continued to maintain its position as the top collector with Rs. 31,030 crore GST collection for the month of October, a significant increase from its September revenue of Rs 26,369 crore.
The CGST collections rose to Rs 33,821 crore, while SGST collections increased to Rs 41,864 crore. IGST, which includes revenues from imports, surged to Rs 99,111 crore, and cess collections amounted to Rs 12,550 crore.
(Source: Ministry of Finance)
UPI Transactions:
UPI transactions reached 16,584.97 million in volume and Rs 23,49,821.46 crore in value in October, with an uptick fuelled by the inclusion of 10 new banks. This highlights the growing adoption of digital payments and expanding financial ecosystem in India.
(Source: NPCI data)
Unemployment:
The unemployment rate for individuals aged 15 and above surged to 10.1% in October 2023, up from 7.1% in September. This marks the first time in 29 months that the rate has exceeded 10%.
The unemployment rate in rural areas rose sharply from 6.2% to 10.8%, while the urban unemployment rate saw a slight decrease to 8.4%. Although unemployment typically increases in October, this year’s rise is notably steep, with the surge being entirely attributed to rural India.
(Source: CMIE)
Inflation:
Year-on-year retail inflation (CPI) for the month of October, 2024 is 6.21%, an increase from last month’s 5.49 % and also the highest in 14 months. Corresponding retail inflation rates for rural and urban areas are 6.68% and 5.62%, respectively.
In October 2024, the provisional year-on-year inflation rate, as measured by the All-India Consumer Food Price Index (CFPI), was 10.87%, with rural inflation at 10.69% and urban inflation at 11.09%.
(Source: MoSPI)
Index for Industrial Production:
According to the data released by the Ministry of Statistics for the month of September, the Index of Industrial Production (IIP) rose to 146.7 in September 2024 from 145.7 in August 2024, indicating a growth rate improvement to 3.1% from a negative -0.1% growth in the preceding month.
The index for primary goods stood at 141.3, marking a 1.8% growth compared to September 2023, whereas capital goods stood at 115.8, with a growth rate of 2.8% year-on-year.
Intermediate goods saw the growth at 4.2% with an index value of 160.7, Infrastructure/Construction Goods reached 178.5 and a growth of 3.3%, Consumer Durables and Consumer Non-Durables saw index value of 133.1 and 145.5 and growth rate at 6.5% and 2.0% respectively.
The top three contributors to the IIP are Manufacture of Basic Metals (Weight: 12.8043), Manufacture of Coke and Refined Petroleum Products (Weight: 11.7749) and Electricity (Weight: 7.9943).
(Source: Ministry of Statistics)
Purchasing Managers’ Index:
Purchasing Managers’ Index (PMI) rose to 57.5 according to the S&P Global’s report for the month of October 2024. In September 2024, the PMI was recorded at 56.5, indicating growth in India’s manufacturing sector.
Companies reported better sales, helped by new products and marketing. Demand for Indian goods rose both in India and abroad, with new deals from Asia, Europe, Latin America, and the US.
There was also more hiring and a rise in raw material purchases. However, costs for materials, labor, and transport grew, leading to higher prices.
“India’s headline manufacturing PMI picked up substantially in October as the economy’s operating conditions continue to broadly improve.” said Pranjul Bhandari, Chief India Economist at HSBC.
(Source: S&P Global)
FII And DII:
In October 2024, the net Foreign Portfolio Investment (FPI) in India showed an outflow of Rs 94,017 crore in equity and an outflow of Rs 4,406 crore in debt, according to Data from the National Securities Depository Limited (NSDL). Total net outflow was seen at Rs 96,358 crore across all investment categories.
The Indian stock market indices closed with minor losses in October 2024. The BSE Sensex ended at 80,065.16, down by 16.82 points (0.02%). The NSE Nifty50 closed at 24,399.40, falling by 36.10 points (0.15%).
(Source: BSE & NSE)
Trade Merchandise:
In October 2024, India recorded total exports of USD 73.21 billion, reflecting a growth of 19.08% compared to October 2023. Total imports were USD 83.33 billion, up by 7.77% from the previous year.
Non-petroleum exports rose to USD 34.61 billion, marking a 25.63% increase. Non-petroleum and non-gems & jewelry exports increased by 27.68% to USD 31.36 billion.
Service exports were estimated at USD 34.02 billion, up from USD 28.05 billion in October 2023. Imports of services were USD 17 billion.
October 2024 resulted in a merchandise trade deficit of USD 27.14 billion. Merchandise exports were USD 39.20 billion, showing a 17.23% increase compared to October 2023 whereas Merchandise imports amounted to USD 66.34 billion, rising from USD 63.86 billion in October 2023.
From April to October 2024, India’s top import sources showing growth included the UAE (55.12%), Angola (99.84%), Taiwan (45.45%), China (9.8%), and Russia (8.85%).
Major drivers of merchandise exports growth in October 2024 includes Engineering Goods, Electronic Goods, Organic & Inorganic Chemicals, Rice and RMG of all Textiles, according to the data released by the Ministry of Commerce and Industry.
(Source: Ministry of Commerce & Industry)
