India's Robust Economic Momentum: 5 Indicators Painting A Picture Of Growth

India's economy is showing signs of robust growth across various sectors, according to EAC-PM Member Sanjeev Sanyal.

In a post on X, Sanyal has pointed out several high-frequency indicators that suggest a strong economic momentum.

"High frequency data suggest robust economic momentum. Domestic automobile sales in India rose 16.3% yoy in Oct on strong demand; railway freight up 8.5%; electricity consumption up 21% (perhaps a bit too strong).Interestingly: rural buyers switched from tractors to 2-wheelers," Sanyal wrote.

"This corroborates other indicators that also suggest strong growth momentum including GST collections at Rs1.72 lakh Cr. in Oct (up 13% yoy); air passenger traffic up 18% (Sept); bank credit up 19.3% yoy (perhaps also bit too strong to sustain for long run," he added.

Here's a detailed look at each of the indicators:

1) Rise in automobile sales

The Indian automobile sector is experiencing robust growth, with sales increasing by 16.3 per cent year-on-year in October.

The surge is led by Maruti Suzuki India, which recorded an all-time high in monthly sales.

The automotive industry witnessed the highest-ever monthly volume for the passenger vehicle segment at 391,472 units in October 2023, logging a growth of 16.3 per cent year-on-year (y-o-y) over 336,679 units sold in the same month last year.

Further, every month in calendar year (CY) 2023 has witnessed record PV wholesales.

2) Growth in Railway freight

Indian Railways reported a nearly 8.5 per cent rise in freight loading in October 2023.

Total originating freight loading for the railways in October 2023 touched 129.03 MT, marking an 8.47 per cent increase from 118.95 MT in the same month the previous year.

Concurrently, the freight revenue for October stood at Rs. 14231.05 crores, showing a 6.57 per cent growth compared to Rs 13353.81 crore in October 2022.

The increase is primarily driven by coal, which constitutes a significant portion of the freight.

3) Increase in electricity consumption

India's electricity consumption jumped nearly 22 per cent to 138.94 billion units (BU) in October.

This substantial rise is attributed to the festive season and a revival in economic activities post-pandemic.

The peak power demand met - the highest supply in a day - rose to 221.62 GW in October. The peak power supply stood at 186.90 GW in October 2022 and 174.44 GW in October 2021.

4) Growth in GST collections

In October, the GST revenue collections in India increased by 13 per cent year-on-year to Rs 1.72 lakh crore. This figure is the second highest-ever monthly collection after Rs 1.87 lakh crore in April 2023.

According to the Finance Ministry, the average gross monthly GST collection in the FY 2023-24 now stands at Rs. 1.66 lakh crore and is 11 per cent per cent more than that in the same period in the previous financial year.

Bank Credit Growth

According to a CARE Ratings report, bank credit off-take has increased by 19.3 per cent year-on-year to reach Rs 153.4 lakh crore for the fortnight ending 6 October 2023.

This growth is partly due to the merger of HDFC with HDFC Bank and an increase in personal loans.

The report suggests a positive outlook for bank credit off-take, with a projected growth of 13-13.5 per cent for FY24, excluding the merger's impact.