1. GST revenues shine bright in July
Goods and Services Tax (GST) mop-up grew 33 per cent year-on-year in July to over Rs 1.16 lakh crore, indicating that the economy is recovering at a fast pace. This is the second highest collection so far, this fiscal after a record Rs 1.41 lakh crore mop-up in April.
The uptick in the GST numbers has been pleasing in the context of economic recovery. Easing of lockdown restrictions have helped the GST collections to once again climb above the 1 lakh mark. The robust collections are likely to continue in the given months considering the recovery phase the country is in.
2. Repo Rates & Reverse Repo Rates remain unchanged
The Monetary policy committee has kept the repo rate and reverse repo rate steady for the seventh consecutive time in August 2021. Growth outlook has been retained, but inflation is expected to stay elevated for longer.
The RBI has acknowledged the upside risk to inflation on the basis of elevated international commodity prices and ongoing supply disruptions. The said accommodative stance and repo rates are likely to continue for the calendar year to support growth.
3. Manufacturing sector sees strong growth in July
The seasonally adjusted IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) rose from 48.1 in June to 55.3 in July, pointing to the strongest rate of growth in three months.
The manufacturing sector has seen a strong rebound in July. Output rose at a robust pace, with over one-third of companies noting a monthly expansion in production. For the trend to sustain in the future a lot of things need to go its way, ramping up of vaccination drives is one such way to keep a blip at bay
4. Services sector stuck in contraction territory
India’s services sector activity remained in red for the third consecutive month in July as demand was hit harder in the contact-intensive sectors than manufacturing Purchasing managers’ index (PMI) for services was at 45.4 in July compared to 41.2 in June
While the manufacturing sector has recovered quickly from the blip due to the second covid wave, services sector has not been able to get up from the slump. Uncertainty over when the pandemic end, and concerns about inflationary pressures and financial troubles, dampened business confidence in July.
5. FPIs pull out money from the Indian market in July
FPIs pull out net investments worth Rs 11,308 crore from equities in July. The outflow comes after net FPI investment in June stood at Rs 17,215 crore.
The redemptions came after investors turned cautious as covid cases have been on an increase in several countries worldwide. The FPIs outflow have been partially offset by DIIs putting money in the month of July. The sentiments have however turned positive in August and inflows have been witnessed till date.
