The Indian economy showed some kind of positive reversal on all indicators in July 2024, with strong and resilient business activities registering their advancement. The performance of both the manufacturing and services sectors was robust, according to the finance ministry's monthly review released Thursday.
"The month saw impressive milestones being reached, substantial growth in GST collections, and a significant rise in e-way bill generation, pointing to an overall increase in economic activity. The stock market indices also reached record highs in July," it states. On balance, India's economic momentum remains intact.
Despite an erratic monsoon, reservoirs have been replenished. Manufacturing and services sectors are expanding, going by the Purchasing Managers' indices. According to the review, tax collections—especially indirect taxes, which reflect transactions—are growing healthy, as is bank credit. Inflation is moderating, and exports of both goods and services are doing better than last year.
The stock markets are holding on quite well. Gross inflows indicate that foreign direct investments are looking up. Gross GST collection in July 2024 remained strong and was the second-highest since May 2023. Overall gross GST revenue was up 10.3 percent year-on-year and that for the period till July for FY25 came in at Rs.7.4 lakh crore.
This also reflects a virtuous increase in GST collections and an increase in GST coverage over diverse economic activities. From an average of 1.68 lakh crore rupees per month in FY24, average monthly GST collections increased to 1.85 lakh crore in FY25. Year-on-year, e-way bills marked a nine-month high in increase at 19.2 percent in July, when the total number of e-way bills issued shot up to 10.5 crore to set a single-month record.
The review indicated that the momentum for the manufacturing sector has sustained for the first four months of FY25, buoyed by strong growth observed in several high-frequency indicators. The Purchasing Managers' Index (PMI) Manufacturing, a critical indicator measuring the domestic manufacturing sector's economic vibrancy, came in at 58.1 for July 2024: well above the series long-run average, and in fact among the very highest ever seen during recent years. Based on buoyant demand conditions and a substantial surge in production volumes, this now bodes well for the economy's overall health. Equally, the service sector continued its strong performance.
In July 2024, the services PMI rose for another strong gain, to 60.3, showing growth in international sales, continuing the advance in the uptake of new orders, and new export orders improving. Sentiment in the services sector was on the whole averaged-positive, even as wage and materials cost rise increased business costs. Among other things, sentiment was lifted by growth in the tourism and hotel industry caused by leisure travel, business travel, and social events.
Read also | Sensex Rises as TCS and Wipro Drive Gains
Read also| RBI Governor Urges Banks to Address Disparity Between Credit and Deposit Growth
