GST Collections Surge, Manufacturing and Services Sectors Thrive in Q1 FY25

ENA Economy 2024-08-23 18:23:11 New Delhi, Aug 23 (KNN) The Indian economy has maintained its growth trajectory in the first quarter (April-July) of FY25, according to the latest monthly economic review from the Department of Economic Affairs. Key indicators point to a strong economic recovery across various sectors. GST collections saw a significant rise in the first four months of FY25, attributed to a broader tax base and increased economic activity. This increase was supported by a double-digit rise in e-way bill generation. Both manufacturing and services sectors demonstrated strong performance, driven by high demand and greater capacity utilisation. The manufacturing growth was characterised by expanding demand conditions, increased new export orders, and rising output prices. The RBI's Order Books, Inventories, and Capacity Utilisation Survey (OBICUS) indicates an expansion in manufacturing capacity utilisation. The services sector has also flourished, notably benefiting from tourism and hospitality industries. Employment conditions show mixed signals, with the RBI Services and Infrastructure Outlook Survey revealing optimism about the overall business situation, turnover, and employment conditions in Q1 of FY25. Foreign portfolio investors (FPIs) have been net buyers since June 2024, reversing previous trends. Net foreign direct investment (FDI) inflows have increased in the first three months of FY25, leading to foreign exchange reserves reaching USD 675 billion by August 2, 2024, sufficient to cover 11.6 months of imports. Retail inflation fell to a near five-year low of 3.5 per cent in July 2024, primarily due to moderated food inflation. The progress of the southwest monsoon has positively impacted kharif sowing, and increased reservoir levels are expected to benefit crop production. The Union Budget FY25 focuses on fiscal consolidation, projecting a reduction in the fiscal deficit supported by robust revenue collection, controlled expenditure, and a strong economy. Merchandise exports and imports in FY25 have surpassed the previous year's levels, signalling a recovery in global demand. While the merchandise trade deficit has widened due to strong domestic demand, services exports have risen, increasing net services receipts. Labour market indicators have shown positive trends, with the quarterly urban unemployment rate steady at 6.6 per cent in Q1 FY25. Net EPFO payroll additions increased year-on-year in Q1 FY25, bolstered by growth in PMI employment sub-indices in July. The Naukri Jobspeak index also improved. These economic indicators paint a picture of resilience and growth across various sectors, setting a positive tone for the remainder of FY25. (KNN Bureau) 39056 https://knnindia.co.in/news/newsdetails/economy/gst-collections-surge-manufacturing-and-services-sectors-thrive-in-q1-fy25 2024-08-23 18:23:11 knnindia.co.in GST Collections Surge, Manufacturing and Services Sectors Thrive in Q1 FY25