Manufacturing News

GST, manufacturing activity, car sales for July indicate economic recovery remains firm

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New Delhi: Goods and Services Tax (GST) collection jumped 28 per cent to touch the second-highest level of Rs 1.49 lakh crore in July, helped by economic recovery and measures taken to curb tax evasion. Worth mentioning here is that the GST collection stood at Rs 1,16,393 crore in the same month a year ago.

Plus, manufacturing activity expanded at the quickest pace in eight months because businesses operate unhampered, signalling that economic recovery remained firm as key interest rates went up. The seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index (PMI) surged to 56. 4 in July from 53. 9 in June due to a huge rise in business orders.

Other high-frequency indicators such as fuel sales, railway freight, power demand, and auto sales also demonstrated economic growth though high inflation appeared to have hit some sectors.

“The divergence in India’s headline PMI relative to the rest of the region may also reflect the resiliency of India’s domestic demand recovery,” Barclays chief India economist Rahul Bajoria told ET.

“And even as global growth weakens, we expect India’s domestic growth to remain reasonably robust.”

As per the data released by the Ministry of Commerce and Industry last week, India’s eight infrastructure sectors grew by 12.7 per cent in June 2022—for the second consecutive month. The production of coal, cement, electricity, refinery products, fertilizers, steel, and natural gas industries rose in June 2022 over the corresponding period of last year.

Auto major Maruti Suzuki, India’s largest passenger car manufacturer, posted an 8.3 per cent increase in July sales from a year ago.
Power consumption was steady at 129 billion units in July. However, the jump from a year ago was only 2.9 per cent due to the high petrol and diesel sales grew rose 12 per cent and 18 per cent, respectively, in July over last year as economic activity expanded.
The financial daily quoted ICRA chief economist Aditi Nayar as saying, “The PMI numbers and the GST inflows point to a robust momentum of economic activity in spite of the global headwinds.”

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