India’s economy ends strong Q1 with manufacturing rebound, GST collections

Manufacturing picks up as car sales and GST collections rise, although heatwave impacts some sectors

July 2, 2024

India’s manufacturing sector activity rebounded in June, with the HSBC India Manufacturing PMI climbing to 58.3 from 57.5 in May, driven by strong demand and new orders

Goods and Services Tax (GST) collections rose by 8% in June, reaching INR 1.74 lakh crore, compared to INR 1.61 lakh crore a year earlier

Sales of passenger cars, sedans, and utility vehicles grew to 340,784 units in June, up from 328,710 units last year, with SUVs accounting for 53% of sales

The Sensex closed at an all-time high on Monday, reflecting positive economic sentiment

India’s economy ended the first quarter on a strong note, with manufacturing activity rebounding in June after two months of slowdown and GST collections showing robust growth. The HSBC India Manufacturing PMI rose to 58.3 from 57.5 in May, indicating expansion driven by buoyant demand and new orders. This surge also boosted the hiring rate to its highest in over 19 years.

GST collections in June increased by 8% to INR 1.74 lakh crore from INR 1.61 lakh crore a year earlier. Passenger car sales also saw a rise, with 340,784 units sold in June compared to 328,710 units in the same month last year. SUVs made up 53% of the sales.

The Sensex reached a new all-time high on Monday, reflecting strong economic sentiment. However, the heatwave may have impacted some sectors, with UPI transactions dipping slightly from 14 million in May to 13.9 million in June.

Fuel sales showed a mixed trend, with petrol sales rising by 3.6% year-on-year in June, while diesel consumption dropped by 1.3%. Aviation fuel sales increased by 4.3%.

The Indian economy grew by a better-than-expected 8.2% in FY24, and the RBI projects a 7.2% GDP rise in FY25. Despite transient factors such as the heatwave and dependency on government capex potentially dampening volume indicators, new export orders rose substantially in June, driven by higher demand from Asian and European countries as well as Australia, Brazil, Canada, and the US.

Source: Economic Times

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