Purveyors of Indian economy were greeted with good news on Friday as both the GST collection for the month of July and manufacturing output showed notable growth. To add to the positive vibe, the forex reserves also registered a sizable increase.
The GST collections for July rose by 7.5% YoY in the month of July, to reach Rs. 1,95,735 crore. The manufacturing sector activity was seen at a 16-month high in July, as per the HSBC India Manufacturing Purchasing Managers’ Index (PMI). The Index reached 59.1 last month from 58.4 in June.
On the forex reserves front, there was an increase of $2.7 billion in the week ending July 25, to $698.19 billion, as per RBI’s data released on Friday.
Taken together, these three indicators suggest that the overall health of the Indian economy is satisfactory. Although the HSBC India Manufacturing PMI flagged some concerns like lack of job creation and decline in business confidence, the overall picture isn’t bad.
There have been concerns about the impact of new tariffs imposed by US President Donald Trump on India – 25% – and its impact on the health of the Indian economy. Experts across the board, as well as government functionaries, have insisted that the impact wouldn’t be on a large scale.
As per estimates of experts, cited in several publications, India’s GDP may suffer a setback of 30 basis points. However, the International Monetary Fund (IMF) has projected India to grow at a rate of 6.4% in 2025. This is an improvement over the earlier projection of 6.2% by the same agency. At this rate, India will remain the fastest-growing major economy in the world.