Robust indicators script buoyant start to Q2

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Macroeconomic indicators, especially on the revenue and consumption front, appeared upbeat to give the second quarter of the current financial year a rousing start with robust GST collections, rise in ITR filings, electricity consumption, sales of aviation fuel and Manufacturing Purchasing Managers’ Index.

Goods and services tax collections were reported at Rs 1.65 lakh crore in June, the third-highest monthly collection ever. It was also an improvement of 2.2% compared to June this year.

The Income Tax Department also claimed a widening direct tax base with 53.67 lakh ITRs filed by first-time taxpayers with total filings at 6.7 crore, a record.

Buoyant demand in the auto-sector, a field to which the fortunes of several industries are linked, was also reported with companies dispatching 3,52,500 vehicles from the factory to the dealers. This number was a 3.1% improvement from the numbers of July 2022.

“Steady rise in GST collections is a reflection of an encouraging economic activity and rise in domestic consumption. This is coupled with the government’s and industry’s efforts towards achieving a better compliance framework, advanced technology, stringent checks on tax evasion, leading to revenue growth for the government,” Krishan Arora, partner, Grant Thornton Bharat told The Economic Times.

Electricity consumption, too, jumped to 139 billion units, which is a good 8.25% higher than the 128.4 billion units clocked in July last year.

Jet fuel sales headed north. With more passengers taking to wings, the rise in July was by as much as 10.3% compared to a year earlier.

The S&P Global India Manufacturing Purchasing Managers’ Index was recorded at 57.7 in July, a marginal 0.1 notch down from 57.8 in June 2023.

While all these point to reasons for being upbeat, the downsides constitute upward pressure on inflation _July figures yet to be reported), global fuel prices that are inching up and might, in turn, stoke inflation and sluggish exports in the face of global slowdown in the developed countries.

However, the GDP growth of 2.4% during April-June period in the US pleasantly surprised those concerned with exports. It not only beat the 2% in the earlier quarter but went contrary to the apprehension of those fearing the economy could slide into recession and spell further gloom for Indian exports.