Economic Indicators and the Finance Ministry’s Hopes for Growth Rebound in 2024-25

• The Finance Ministry and Reserve Bank of India’s hopes for a growth rebound in the second half of 2024-25 are shattered by recent economic indicators.

• GDP growth fell to 5.4% in the second quarter, a temporary blip.

• Policymakers acknowledge slowing consumption demand due to restrained spending trends in urban India.

• Despite this, optimism is seen for a festive boost from cities and a resilient rural demand outlook.

• Bank credit growth slowed for the fifth consecutive month in November, while core infrastructure sectors expanded at a four-month high pace of 4.3%.

• Factory activity levels through November and December were the worst through 2024, despite input cost inflation spurring price hikes.

• Gross revenues for December were at a three-month low of almost ₹1.77 lakh crore, marking the joint-second slowest uptick in three and a half years.

• Net revenues after refunds were just 3.3%, the slowest this fiscal.

• Revenue growth from domestic transactions slowed to 8.4%, while import revenues grew just 3.9%.

• The Centre needs to address the pain points afflicting consumption, including high inflation.