May data paints healthy picture of the economy

GST collection, car sales post robust numbers

Aday after the economic growth data beat analysts’ expectations for the March quarter as well as FY23, a set of highfrequency indicators released on Thursday, including goods and services tax (GST), manufacturing purchasing managers’ index (PMI), passenger auto sales, and Unified Payments Interface (UPI) transactions, painted a robust picture of the economy in FY24.

The manufacturing PMI hit a 31month high of 58.7 in May, driven by a record expansion in input stocks and a strong increase in new orders and output, S&P Global said.

Gross goods and services tax (GST) collection in May rose 12 per cent from the year earlier to ~1.57 trillion, indicating that the economy is holding firm despite external headwinds.

The auto industry recorded its highest ever May sales (despatches to dealers) of domestic passenger vehicles (PVS) at 334,802 units, growing 13.5 per cent yearon-year, amid a better semiconductor chip supply and high demand for sport utility vehicles.

UPI transactions in May scaled a new high of ~14.3 trillion in value and 9.41 billion in volumes, rising 2 per cent and 6 per cent, respectively.

The data released by the National Statistical Office on Wednesday showed gross domestic product (GDP) growth of 6.1 per cent in the March quarter and 7.2 per cent in FY23. The robust GDP data and encouraging signs of high-frequency indicators led to a spate of upward revisions in FY24 GDP growth forecasts by analysts.

“Private investment activity looks robust and domestic monetary and credit conditions remain supportive of growth in FY24,” said Soumya Kanti Ghosh, chief economic advisor, State Bank of India.

Describing data as the "new gold", Congress leader Rahul Gandhi has said there is a need to have appropriate regulations on data safety and security. Gandhi made the remarks on Wednesday during his interaction with Silicon Valley-based start-up entrepreneurs. In another event, he said thathedidnotimaginehisdisqualificationfrom Lok Sabha was possible when he joined politics but asserted that it has given him a "huge opportunity" to serve the people.