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  • Raghav Sand

IndEcon (Indian Economy) July 2022

Markets are overreacting to slightest of negative news. Whether you are commoner or a corporate, the current economic situation has brought you to the drawing board. Governments have shrugged off responsibility by blaming external pressures. Stimulus and subsidy bills have put strain on the fiscal health of all major economies.

Capitalism pinches the have-nots more than the haves. In the past few weeks, central bankers across the world have increased key policy rates to check inflation. Numbers can be presented in various ways, and policy makers almost always cherry-pick them. 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.


GST Collection July 2022


The gross GST revenue collected in the month of July 2022 was INR 1,48,995. This is second highest revenue since introduction of GST. The revenues for the month of July 2022 are 28% higher than the GST revenues in the same month last year of INR 1,16,393 crore.


Chart: The Know-How Journal; Data: GoI

For five months in a row now, the monthly GST revenues have been more than INR 1.4 lakh crore, showing a steady increase every month. The growth in GST revenue till July 2022 over the same period last year is 35% and displays a very high buoyancy.


Inflation Nation


The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) will not stop increasing rates until it brings inflation under control. Consumer Price Index (CPI) climbed down in the month of July but it is still above the upper tolerance limit set by the RBI. Vegetables, spices, footwear, and fuel have registered double-digit inflation over the past twelve months.

Inflation India July 2022
Data: MoSPI, Govt. of India

As per internal deliberations of the RBI, inflation is set to remain above the six percent mark till the end of calendar year. Government has surplus stock of food grains, and must use it judiciously in the coming months.


Automobile Sales


Auto sales for the month of July fell by -8%. July is generally considered as a lean month before festival season commences in August. When compared with July 2019, a pre-COVID month, total vehicle retails fell by -20%. Passenger Vehicles (PV) and tractor continued to outperform by growing 19% and 7%, respectively. All the other categories were in red with 2-wheeler, 3-wheeler and Commercial Vehicle (CV) falling by -28%, -15% and -4% respectively.

Auto Sales July 2022
Data: Federation of Automobile Dealers Associations of India

2-wheeler sales in rural India continues to underperform. CV retail figures continue to witness good demand as Government’s infrastructure push is helping customers in concluding their purchase. Apart from this, the Bus segment also witnessed beginning of demand recovery as educational institutions and offices are once again back to normal mode. The PV segment is witnessing a dream run as retail sales are already higher than 2019.


Indian Stock Market


Equity markets are registered healthy gains in the past couple of months. After months of withdrawals the FPI data was back in the green. Domestic investors, both retail and institutional, are consistently ploughing money in the securities market.

Data: NSDL and NSE Limited

Manufacturing and Services


Indian manufacturers made a positive start to the second fiscal quarter, with marked gains in growth of new business and output. While companies stepped up input purchasing, job creation remained marginal amid an uncertain outlook and a general lack of pressure on operating capacities. There was also good news on the price front, as rates of both input cost and output charge inflation subsided.


The recovery of the Indian service sector lost momentum during July as weaker sales growth and inflationary pressures restricted the latest upturn in business activity. While marketing efforts underpinned another rise in new work intakes, competitive pressures and unfavourable weather dampened demand. That said, the weaker recovery was supplemented by retreating price pressures.


Simple Things


Markets have always adapted to the external developments. The winter of 2022 may bring plenty of surprises for the world economy. It is fairly easy to analyze an event which has already occurred, while even after years of practice, it is difficult to predict the future. Economists and central bankers rely heavily on the trial-and-error approach.


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