India's manufacturing activity hits 8-month high in March
What's the story
India's manufacturing sector witnessed a strong rebound in March, with the HSBC India Manufacturing Purchasing Managers's Index (PMI) hitting an eight-month high of 58.1. This is a sharp rise from the previous month's 14-month low of 56.3. The PMI has recorded its eighth reading of above-57 for the fiscal gone by, reflecting strong domestic demand and better order book conditions.
Auto sales surge
Automotive sector witnesses significant growth
The automotive industry also witnessed a March surge, with top manufacturers posting strong sales numbers. Mahindra & Mahindra posted an 18% increase in sales over the same period last year while tractor manufacturer Escorts Kubota reported a 15% rise. Two-wheeler sales, which are considered a barometer of rural demand, also saw double-digit growth for most companies during the period.
Fiscal performance
Fiscal year ends on a high note
The fiscal year concluded on a high note with goods and services collections hitting an 11-month high of ₹1.96 lakh crore. Unified Payments Interface (UPI) transactions also neared ₹25 lakh crore during this time. However, coal production lagged behind expectations, ending the year with a 3.1% dip in output as compared to the previous fiscal year.
Projections
Government's growth forecast for FY25
The government has projected a growth rate of 6.5% for FY25. However, manufacturing is expected to underperform with a predicted fall to 4.3% from the previous fiscal year's figure of 12.3%. This forecast suggests potential challenges ahead for the manufacturing sector in maintaining its current momentum into the new fiscal year.