State of the Economy: How did the macroeconomic indicators perform in March 2024?

~ Ritesh and Shrishti Sharma

The Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) maintained its stance on the policy repo rates unchanged at 6.5 per cent for the seventh straight time in April’s RBI policy decision. Governor Shaktikanta Das discussed significant factors outlining the projections for the Indian economy.

March - the last month of fiscal 2024, observed different elements of the economy to be progressive and falling in the desired spectrum for the Indian economy’s development and expansion. Here is how they performed:

Goods and Service Tax

The GST revenue for March 2024 reached ₹1.78 lakh crore, marking the second-highest collection ever and reflecting an 11.5 per cent year-on-year growth.

A significant driver of this surge was the increase in GST collection from domestic transactions, which saw a growth of 17.6 per cent. Additionally, GST revenue net of refunds for March 2024 stood at ₹1.65 lakh crore, representing an 18.4 per cent growth compared to the same period last year.

Fiscal Year 2023-24 achieved a historic milestone with total gross GST collection exceeding ₹20 lakh crore, showcasing an 11.7 per cent increase from the previous fiscal year.

The average monthly collection for FY 2023-24 stood at ₹1.68 lakh crore, surpassing the previous year's average of ₹1.5 lakh crore. The growth differentials were observed across regions, with Ladakh showing an impressive y-o-y growth of 82 per cent, while Mizoram experienced a decline of 29 per cent.

Inflation

The retail inflation eased to 4.85 per cent in March, 2024 as per Ministry of Statistics and Programme Implementation’s (MoSPI) All India Consumer Price Index (CPI) data.

The CPI Inflation was at 5.09 per cent in February 2024.

As per the latest stats, the combined Consumer Food Price Index (CFPI) stands at 8.52 per cent for the last month of fiscal 2024.

The annual rate of inflation based on the All India Wholesale Price Index (WPI) number is 0.53 per cent for the month of March, 2024 according to the Ministry of Commerce and Industry.

The positive rate of inflation is primarily attributed to increase in prices of food articles, electricity, crude petroleum & natural gas, machinery & equipment and other manufacturing etc.

Unemployment

India's unemployment rate saw a decline to 7.6 per cent in March 2024 from 8 per cent in February 2024, as per CMIE’s Consumer Pyramids Household Survey.

This decrease was reflected across urban and rural India, with the rural unemployment rate falling to 7.4 per cent in March from 7.8 per cent in February, and urban unemployment rate dropping from 8.5 per cent to 8.2 per cent.

However, this decline coincided with reductions in the labour participation rate (LPR) and employment rate, with LPR decreasing to 41.1 per cent in March from 41.4 per cent in the previous month, and the employment rate falling from 38.1 per cent to 37.9 per cent in March 2024.

India’s Index of Industrial Production

Since the data for the month of March will be available in May 2024, the latest statistics for the Quick Estimates of Index of Industrial Production (IIP) for February 2024, stands at 147.2.

The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of February 2024 stand at 139.6, 144.5 and 187.1 respectively, as per MoSPI.

As per Use-based classification, the indices stand at 148.2 for Primary Goods, 106.2 for Capital Goods, 158.9 for Intermediate Goods and 179.8 for Infrastructure or Construction

Goods for the month of February 2024.

Furthermore, the ministry also released numbers of indices for Consumer durables and

Consumer non-durables which stand at 121.6 and 148.9 respectively for Feb ‘24.

India Purchasing Managers' Index (PMI)

The HSBC India Manufacturing Purchasing Managers' Index (PMI) for March 2024 was revised slightly lower to 59.1 from preliminary estimates of 59.2.

This figure indicates the fastest growth in factory activity since February 2008, driven by significant growth in output and new orders, which saw the most substantial increase in nearly three-and-a-half years.

Notably, new export orders also rose significantly, marking the highest growth since May 2022. The PMI report also highlighted a significant increase in buying levels, reaching the fastest rate since mid-2023 and among the strongest levels in nearly 13 years.

Employment levels in the manufacturing sector climbed to their strongest since September 2023. However, concerns over inflation impacted business sentiment, leading to a four-month low in sentiment levels.

FII DII Stats

The Indian stock market remained buoyant in the final month of FY 24. The share market witnessed highs, lows, rallies and decent profit booking days in March 2024.

The net investments made by the foreign portfolio investors (FPIs) stood at Rs 51,996.20 crore in March, according to the National Securities Depository Limited (NSDL).

The net purchase / sales by the domestic institutional investors stood at Rs 56, 311.60 crore.

The Indian benchmark indices BSE Sensex and NSE Nifty closed at 73,651.35 and 22,326.90, respectively on March 28, the last trading day of the fiscal year 2024.

Trade Merchandise

Despite persistent global challenges, overall exports (merchandise + services) are estimated to surpass last year’s highest record, said the Ministry of Commerce and Industry.

It is estimated to reach USD 776.68 Billion in FY 2023-24 as compared to USD 776.40 Billion in FY 2022-23.

And FY 2023-24 closes with the highest monthly merchandise exports of the current FY in March 2024 at $41.68 bn.

The overall trade deficit is estimated to significantly improve by 35.77 per cent from $121.62 bn in FY 2022-23 to $78.12 bn in FY 2023-24.

The merchandise trade deficit improved by 9.33 per cent at $240.17 billion in the current financial year in comparison to $264.90 billion in fiscal 2023.

UPI Transactions

As of March 2024, the Unified Payments Interface (UPI) landscape continues to expand, with 572 banks live on UPI.

The volume of UPI transactions reached 13,440.00 million, with a total value of ₹19,78,353.23 crore, showcasing the continued growth and adoption of digital payment methods across the country.

Foreign Exchange Reserves

India’s foreign exchange reserves reached $645.58 billion standing at record levels, as of March 29, 2024.

The Reserve Bank of India’s Weekly Statistical Supplement recorded an increase of USD 2.95 billion in the total forex reserves.

The foreign currency assets (FCAs) surged by $2.35 billion to $570.62 bn. The Gold reserves rose by $673 million to $52.16 bn.

However, the Special Drawing Rights (SDRs) were down by $73 mn to $18.15 bn and India’s Reserve position in the International Monetary Fund (IMF) also decreased by $2 mn to $4.66 bn.

The Indian Rupee experienced fall in value against the US Dollar throughout the month and closed at 83.39 against the US dollar on March 28, 2024.