The key indicators of the Indian economy showed buoyancy at the end of FY 2023-24 with PMI, GST, bank credit among other showed growth trajectory for the fiscal.
As per the Monthly Economic Review for March released by the National Council of Applied Economic Research (NCAER) on Sunday, the Purchasing Manager’s Index (PMI) for manufacturing has increased, while that of services maintained a robust trend.
The PMI for manufacturing activity increased to 56.9 in February, reflecting a strong expansionary momentum.
Growth in the output of eight key infrastructure sectors rose to a three-month high of 6.7% in February from 4.1% in January 2024, the report said.
The bank credit growth remained strong at 20.5% with robust growth for personal loans, services, and agriculture and allied activities.
Also, the GST collections too remained buoyant, reaching a value of Rs 1.7 lakh crore in February, registering a year-on-year growth of 12.5%.
The collections of GST E-way bills marked an equally impressive year-on-year growth of 18.9%, it highlighted.
Meanwhile, the inflationary pressures remained elevated with Consumer Price Index headline inflation at 5.1% in February 2024, primarily due to high food price inflation and despite core inflation declining.
Poonam Gupta, director general, NCAER said, “These and other markers corroborate the optimistic growth outlook of 7.6 per cent growth rate for FY 2023-24 as per the Second Advance Estimates.”
“As in the past economic growth has been accompanied by indicators pointing toward macroeconomic sustainability,” Gupta said.
She pointed out that the external sector, in particular, improved with the Current Account Deficit (for Q3 FY2023-24) moderating; remittances flow remaining high at $31.4 billion; services trade surplus increasing; portfolio inflows resuming; and all of this enabling a sharp increase in India’s foreign exchange reserves to nearly $650 billion.
Strong growth combined with elevated inflation rates will likely result in a status quo on policy rates when the RBI Monetary Policy Committee meets on April 3-5, Gupta added.
Recently, the Ministry of Commerce and Industry has said the combined Index of Eight Core Industries (ICI) increased by 6.7% in February 2024 as compared to the Index of February.
It said the production of Coal,Natural Gas,Cement, Steel, Crude Oil,Electricity and Refinery Products recorded positive growth in February 2024.