-Samriddhi SIngh Mahar & Suhani Prakash
The Composite PMI dropped from 60.7 in August to 58.3, with the manufacturing PMI dropping to an eight month low, indicating fierce competition and deceleration in output.
Unemployment dropped to 7.8%, however, the decline in both employment and labor force participation rates highlights a decline in people seeking jobs.
Industrial activity also fell, with IIP growth declining from 4.7% in July to -0.1% in August.
Meanwhile, retail inflation surged to 5.49%, significantly higher than August’s 3.65%, with rural inflation surpassing urban rates.
Amid these ups and downs in the economy, what does India’s macroeconomic indicators for the month of September say? Here is a detailed break-up:
Goods and Services Tax:
Total net GST revenue grew by 3.9 per cent, from Rs. 1,47,098 crore in September 2023 to Rs. 1,52,782 crore in September 2024.
The total domestic GST revenue grew by 5.9 per cent, from Rs. 1,20,686 crore in September 2023 to Rs. 1,27,850 crore in September 2024, whereas Import GST revenue grew by 8.0 per cent, from Rs. 42,026 crore in September 2023 to Rs. 45,390 crore in September 2024.
Ladakh recorded the highest state-wise growth of GST revenues for September 2024 with a growth rate of 24 per cent, followed by Haryana and Delhi. Manipur experienced the sharpest decline, with a 33 per cent decrease. However, the total GST revenue across India grew by 6%, increasing from Rs. 1,20,686 crore in September 2023 to Rs. 1,27,850 crore in September 2024.
Inflation:
Retail Inflation (CPI) in September 2024 is 5.49 per cent, which is higher than inflation rates in August 2024 (3.65) and September 2023 (5.02). Retail inflation in the rural sector is also comparatively much higher than the urban areas.
All India Consumer Food Price Index (CFPI) number is recorded at 9.24 per cent, with rural rate being 9.08 per cent and urban rate at 9.56 per cent.
Significant decline in inflation has been seen in Pulses and products, Spices, Meat & fish and Sugar & confectionery subgroups in the month of September, 2024. Manipur recorded the largest increase in its rural index from 225.4 to 230.3 in September 2024. Prices have increased across most Indian states from August to September 2024, especially in the rural sphere.
UPI Transactions:
In September 2024, 14 new banks came live on UPI and the transactions increased by 78.7 million, compared to August 2024. This indicates growth and expansion of UPI amongst Indian users and UPI being a preferred mode of digital payments in the country.
Unemployment:
The unemployment rate this year has been varying significantly, peaking in June and August. Though September has shown a decrease in unemployment rate to 7.8 per cent, the employment rate and labour participation has also declined.
According to the data by CMIE, the labour participation rate fell from 41.6 per cent to 41 per cent and the employment rate fell from 38 per cent in August to 37.8 per cent in September.
This indicates that while the unemployment rate has dropped, the decline in both the labor participation rate and employment rate paints a picture that fewer people are engaged in the labor market, either employed or actively seeking jobs.
Purchasing Managers’ Index (PMI)
India’s output growth slowed in September, with Composite PMI falling from 60.7 in August to 58.3.
India’s manufacturing PMI dropped to an 8-month low at, falling from 57.5 in August to 56.5 in September. While new business and purchases rose, input buying grew at its slowest pace in 2024.
Similarly, the services PMI fell from 60.9 in August to 57.7.
“The headline Business Activity Index fell below 60 for the first time in 2024, but we note that at 57.7, it was still much above the long-term average,” said Pranjul Bhandari, Chief India Economist at HSBC.
India’s Index for Industrial Production
India’s Index of Industrial Production (IIP) released by the Ministry of Statistics, released their data for August, with the growth rate falling from 4.7% in July to (-0.1) in August.
The IIP contracted by 0.1% in August, down from July’s 4.7%, while manufacturing output increased by 1%.
The Quick Estimates of IIP with base 2011-12 were 141.6 for Primary Goods, 108.1 for Capital Goods, 162.2 for Intermediate Goods, and 180.2 for Infrastructure/Construction Goods. Consumer Durables and Non-Durables stood at 129.6 and 141.6, respectively.
In August 2024, the top three contributors to growth in the manufacturing sector were “Manufacture of basic metals” (3.0%), “Manufacture of electrical equipment” (17.7%), and “Manufacture of chemicals and chemical products” (2.7%).
FII and DII
Data from the National Securities Depository Ltd. (NSDL) shows that Foreign Portfolio Investors (FPIs) invested Rs 57,724 crore (approximately $6.89 billion USD) into Indian equities in September. Including equities, debt, hybrid, mutual funds and Alternative Investment Funds (AIFs), there was an inflow of Rs. 93,538 crore (approximately $11.22 billion USD)
The Indian indices NSE Nifty 50 and BSE Sensex closed at 25,810.85 and 84,299.78 respectively.
Trade merchandise
The trade deficit contracted from USD 65.40 billion in August to USD 65.19 billion in September 2024.
India’s total exports (merchandise and services combined) however for September 2024 reflected a growth of 3.76% compared to September 2023. Total imports for September 2024 reached USD 71.68 billion, marking a 3.79% increase from the same period in 2023.
Between April and September 2024, India’s total exports are estimated at USD 393.22 billion, showing a growth of 4.86%. During the same period, total imports are estimated at USD 448.05 billion, a rise of 6.89%.
Merchandise exports for September 2024 amounted to USD 34.58 billion, slightly contracting as compared to USD 34.71 billion in August. Conversely, merchandise imports fell sharply from USD 55.36 billion, compared to USD 64.36 billion in August.
In September 2024, services exports were estimated at $30.61 billion, slightly lower than the $30.69 billion in August. Meanwhile, services imports for September reached $16.32 billion, an increase from $15.70 billion in August.
