October Festivities Fuel Economic Growth: Manufacturing Rebounds, Tax Collections Surge
The festival season brought a boost to India’s economy in October, driving manufacturing, tax collections, and digital transactions. Data released over the past week shows an optimistic start to the third quarter.
Key Highlights:
- Manufacturing Growth: October’s Manufacturing Purchasing Managers’ Index (PMI) rose to 57.5, up from September’s 56.5, reflecting a rebound in production as demand spiked during the festive period.
- GST Collections Hit High: Goods and Services Tax (GST) revenues reached a six-month high of ₹1.87 lakh crore, marking an 8.9% year-on-year increase. However, the single-digit growth hints at a potential cooling-off in consumer spending, according to tax experts.
- Vehicle Registrations: Vehicle sales data showed a mixed trend. According to VAHAN, passenger vehicle registrations were flat, but two-wheeler registrations surged by 36% year-on-year, with Hero MotoCorp reporting an 18% increase.
- Coal Production: Coal output climbed 7.5% in October compared to the previous year, driven by heightened power demand.
- Record Digital Transactions: UPI transactions reached a record 16.58 billion in volume and ₹23.5 lakh crore in value, marking the sixth consecutive month of transactions over ₹20 lakh crore. FASTag volumes also grew 8%, with the transaction value reaching ₹6,115 crore.
Experts suggest that these indicators provide a favorable outlook for economic growth, with the Reserve Bank of India projecting a 7.4% GDP growth for the last two quarters of the fiscal year.
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