NEW DELHI: High-frequency data for February released on Friday showed India’s economy continues to cruise after posting a better-than-expected 8.4% expansion in the December quarter.
Goods and services tax (GST) collection surged 12.5% to ₹1.68 lakh crore, auto firms posted their highest monthly sales and manufacturing activity hit a five-month high. Data released on Thursday showed the economy is likely to expand 7.6% in FY24, higher than 7.3% projected in January.
“Coming on the back of the robust GDP numbers for the third quarter, the impressive GST collection figure is reflecting the broad-based consumption increase across sectors as GST is a consumption tax,” said MS Mani, partner, Deloitte India.
The HSBC India Manufacturing PMI strengthened to a five-month high of 56.9 in February.
This was buoyed by a rise in new export orders and sustained domestic demand. In January, Manufacturing PMI was at 56.5.
According to industry estimates, car sales increased by 11.3% from a year earlier to over 335,000 units in February, hitting an all-time high for the month.
February saw 10.9 billion UPI transactions, up sharply from 7.5 billion a year earlier.
Coal production surged 11.3% to 96 million tonnes in February while average daily electricity consumption increased 4.8% in the month to 4.4 billion units.
Railways freight rose 10.1% in February from the previous year.
“Based on the FY24, 7.6% GDP growth, we estimate Q4 GDP growth at 5.9%, which we believe is an understatement. Thus, it is most likely that FY24 GDP growth could be within striking distance of 8%,” said SBI researchers on Friday, following the GDP data release.
The robust growth has also spurred economists to make a spate of revisions to the FY25 forecast. Barclays expects the Indian economy to grow 7%, instead of the 6.5% projected earlier.
However, activity is expected to slow in the fourth quarter from 8%-plus growth in the preceding three — 8.2% in the April-June period, 8.1% in July-September and 8.4% in October-December.
Core industries data released Thursday indicated the growth of the infrastructure sector declined to a 15-month low of 3.6% in January compared with 4.9% in the previous month, underlining the possible moderation in the ongoing quarter.
Source: The Economic Times
