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  • Raghav Sand

Indecon: December 2020

Most economic indicators showed an uptick in the month of November due to the festive season. Further normalisation of economic activity has played its part to infuse life in key indicators such as Goods and Services Tax (GST) collections, Gross Domestic Product (GDP) and consumption of petroleum products, etc. Indecon (India plus economy) is a monthly feature, where it is our endeavour to decipher key economic developments and statistics from the past month/quarter.

Goods & Services Tax

The gross GST revenue collected in the month of November, 2020 was ₹1,04,963 crore of which CGST was ₹19,189 crore, SGST was ₹25,540 crore, IGST was ₹51,992 crore (including ₹22,078 crore collected on import of goods) and Cess was ₹8,242crore (including ₹809 crore collected on import of goods).

The government has settled ₹22,293 crore to CGST and ₹16,286 crore to SGST from IGST as regular settlement. The total revenue earned by Central Government and the State Governments after regular settlement in the month of November 2020 was ₹41,482 crore for CGST and ₹41,826 crore for the SGST.

In line with the recent trend of recovery in the GST revenues, the revenues for the month of November 2020 were 1.4% higher than the GST revenues in the same month last year. During the month, revenues from import of goods was 4.9% higher and the revenues from domestic transaction (including import of services) were 0.5% higher than the revenues from these sources during the same month last year.

Gross Domestic Product: Second Quarter

GDP at Constant (2011-12) Prices in Q2 (July – September) of 2020-21 is estimated at ₹33.14 lakh crore, as against ₹35.84 lakh crore in Q2 of 2019-20, showing a contraction of 7.5 percent as compared to 4.4 percent growth in Q2 2019-20.

Foreign Portfolio Investment

The last two months, i.e October and November 2020, have witnessed a significant resurgence in FPI inflows driven primarily by equity inflows resulting in the highest ever FPI inflows for a month for India. As of 28th November 2020, FPI inflows stood at ₹62,782 crore. Of this, equity inflows amounted to ₹60,358 crore while FPI net investment in debt and hybrid was to the tune of ₹2,424 crore. In October and November 2020, FPIs primarily witnessed inflows into India.

There has been a secular trend of positive net flows in the equity segment in November without any reversal till date. The highest inflow in total FPI investment was witnessed on 12th November, marking a single day peak of ₹11,056 crore.

Foreign Direct Investment

Total Foreign Direct Investments (FDI) inflows into India during the second quarter of financial year 2020-21 (July, 2020 to September, 2020) have been US$ 28,102 million, out of which FDI equity inflows were US$ 23,441 million or ₹174,793 crore. In rupee terms, the FDI Equity inflows of ₹224,613 crore are 23% more than the last year. August, 2020 has been the significant month when US$ 17,487 Million FDI equity inflows were reported in the country.

Both FDI equity inflows and total FDI inflows into India have shown a secular rise over the years, with 2019-20 the year with the highest FDI in the last six years. The measures taken by the government on the fronts of FDI policy reforms, investment facilitation and ease of doing business have resulted in increased FDI inflows into the country.

No Dividend Distribution by Banks

In view of the ongoing stress and the heightened uncertainty on account of COVID-19, it is imperative that banks continue to conserve capital to support the economy and absorb losses, if any. In order to further strengthen the banks’ balance sheets while at the same time supporting lending to the real economy, Reserve Bank Of India (RBI) has decided that scheduled commercial banks and cooperative banks shall not make any dividend pay-out from the profits pertaining to financial year 2019-20.

Banks have been asked to plough back profits


CPI inflation cooled down marginally to settle at 6.93 per cent for the month of November 2020. It was at 7.3 per cent in September and further rose to 7.6 per cent in October 2020. Both three months and one year ahead inflation expectations of households have eased modestly in anticipation of the seasonal moderation of food prices in the winter and easing of supply chain disruptions.

Purchasing Managers’ Index

November PMI indices marginally declined in both the manufacturing and services sectors. The IHS Markit India Manufacturing PMI fell to 56.3 in November from 58.9 in October, while the services PMI decreased to 53.7 in November from 54.1 the previous month. Despite the decline, the latest reading was consistent with a sharp rate of expansion, driven by the ongoing easing of COVID-19 restrictions.

Petroleum Products (October Actuals)

Actual Production and Change (Source: OPEC)

In terms of fuels, gasoline (petrol) registered a y-o-y rise of around 0.03 million barrels per day (mb/d), supported by the easing in lockdown measures, a steady rise in mobility and healthy vehicle sales. The latter increased at a solid pace as major manufacturers such as Suzuki and Hyundai posted increases of more than 17% y-o-y. Petroleum products’ data for November 2020 will be released in January 2021.

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