~ Ritesh and Shrishti Sharma
In the analysis of the economic landscape of India in November 2023, we are faced with a resilient nation that has navigated global challenges during this decade. From the start of the global pandemic to the Russia-Ukraine crisis and widespread monetary tightening, India has emerged as a firm player and moved up from the tenth to the fifth largest economy by 2023, achieving a remarkable 7.6 percent growth in the July-September quarter. .
The Reserve Bank of India’s Monetary Policy Committee kept the policy rate steady at 6.5 percent at its December meeting, projecting a promising 7 percent GDP growth for FY24 and an inflation rate of 5.4 percent.
As we analyze the nuances of November 2023, our attention converges on high-frequency indicators, carefully unraveling the intricate threads of India’s economic pulse.
Goods and Services Tax
The Goods and Services (GST) revenue collection for November 2023 has reached ₹ 1,67,929 lakh crore, registering a commendable year-on-year growth rate of 15 percent. The data released by the Finance Ministry for GST marks the sixth occasion in FY 2023-24 where the gross GST collection crossed the threshold of ₹ 1.60 lakh crore.
The GST collection for FY24 till November 2023 reveals a substantial growth of 11.9 percent per annum. However, this is slightly less than October’s collection, which was at 1.72 lakh crores.
Inflation
India’s headline retail inflation rate, as measured by interannual changes in the all-India consumer price index (CPI), rose to 5.55 percent in November, according to data released by the Ministry of Statistics and Program Implementation. This was mainly due to the rise in prices of key food items.
The Consumer Price Index (CPI) inflation in October was 4.87 percent. However, at 5.55 percent, the latest CPI inflation figure is below expectations, and economists are predicting growth to 5.8 percent yoy in November.
The Reserve Bank of India in its Monetary Policy Committee meeting in December left the inflation target unchanged at 5.4 percent. Headline inflation remained within the RBI’s tolerance of 2 to 6 percent for the third month in a row.
The wholesale price index (WPI) data released by the Ministry of Commerce and Industry showed that the WPI inflation reached an annualized 0.3 percent in November, which is higher than the 0.5 percent deflation in October. This is due to an increase in food items at large levels.
Unemployment
November ended with an unemployment rate of 9.2 percent according to data recorded by the Center for Monitoring Indian Economy (CMIE). This is lower than the recent peak of 10.1 percent recorded in October 2023.
The opportunities in the form of seasonal employment, both in the rural and urban sectors also contribute to the changing unemployment rate on a monthly basis.
According to the annual report of the Periodic Labor Force Survey (PLFS), In rural areas, Unemployment rate decreased from 5.3% in 2017-18 to 2.4% in 2022-23 while for urban areas it decreased from 7.7% to 5.4. percentage Unemployment rate for males in India decreased from 6.1% in 2017-18 to 3.3% in 2022-23 and corresponding decrease in Unemployment rate for females was from 5.6% to 2.9%.
PMI
Businesses maintained a positive outlook for activity in the next 12 months, although confidence weakened somewhat due to rising inflation expectations.
Despite falling from 58.4 in October to a one-year low of 56.9 in November, the seasonally adjusted S&P Global India Services Business Activity Index showed sharp growth in output across the sector. The pace of expansion was also considerably stronger than its long-term average. Survey participants who signaled growth cited favorable demand trends and new business gains.
As has been the case every month for more than two years, service providers in India recorded sales growth in the middle of the third fiscal quarter. The uptick is said to have stemmed from new customer wins, strong demand and favorable market conditions. The overall pace of growth softened to the weakest since November 2022, but was sharp and above the series trend.
FII DII Data
For the month of November, the Foreign Portfolio Investors (FPIs) invested around 24,546 rupees in the Indian stock market, according to the data of National Securities Depository Limited (NSDL). The domestic institutional investors bought shares worth a net Rs. 12,762.14 as per the provisional data on the NSE.
Commercial Goods
India’s overall exports in November 2023 are estimated at $62.58 billion, which is a slight increase of 1.23 percent over $61.82 billion in November 2022. Aggregate trade deficit during April – November improves by 38.79 percent from $100.38 billion in 2024 to $61.44 billion. in 2023.
The trade deficit also improved from $189.21 billion in April-November 2022 to $166.35 billion in April-November 2023, according to the data released by the Ministry of Trade and Industry.
Major contributors to export growth in November 2023 consist of Iron Ore, Gems and Jewellery, Medicines and Pharmaceuticals, Fruits and Vegetables, Meat, Dairy and Poultry Products, Mica, Coal and Other Ores, Minerals Including Processed Minerals and Cotton Yarn/Fabs. /Factories, Handloom Products etc.
Industrial Production
Since, the data for November will be released in January, according to the latest data on industrial production released by the Ministry of Statistics and Program Implementation, the Rapid Estimates of Index of Industrial Production (IIP) with base 2011-12 stands at 144, 7. India’s IIP growth rate increased to a 16-month high of 11.7 percent in October 2023.
The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of October 2023 stand at 127.4, 141.8 and 203.8 respectively.
According to Usage Based classification, the indices stand at 146.1 for Primary Goods, 106.9 for Capital Goods, 157.8 for Intermediate Goods and 173.9 for Infrastructure/Construction Goods for the month of October 2023.
Further, the indices for Consumer durables and Consumer non-durables stand at 123.0 and 141.5 respectively for October.
Forex and Gold Reserves
India’s foreign exchange reserves rose to $604.04 billion as of December 1, according to data from the Reserve Bank of India. The forex reserves witnessed growth for the third week continuously. And the figure is a four-month high among global economies witnessing a slowdown.
At the MPC meeting, RBI Governor Shaktikanta Das said, “We remain confident of comfortably meeting our external funding requirements.”
Foreign currency assets (FCAs) stood at $533 billion, which was $528 billion in October. The gold reserves rose to $47 billion while SDRs increased to $18.2 billion.
UPI Transactions
Projected to reach 900 million by 2025 according to National Information Center (NIC), the number of mobile phone users in India underscores the nation’s shift to digital finance.
In November, with 516 active banks, the Unified Payments Interface (UPI) witnessed 11,235.29 million transactions, totaling Rs. 17,39,740.60 crore through the National Payments Corporation of India (NPCI). This reflects a modest increase compared to transaction values in October.