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What 40 Indicators Reveal About India’s Economy in September
Author
Shoonya Team
The Moneycontrol Eco Pulse Index rose to 56.3 in September from 55.7 in August. It stayed well above 50, the level that separates expansion from contraction, and recovered part of the slowdown seen the month before. Most of the gains came from purchasing managers’ indices, automobile sales, credit growth, port traffic and infrastructure output. Fuel consumption, hiring and rural employment data showed areas of weakness.
How Did Vehicle Sales Perform in September?
Automobile sales were among the biggest contributors to the September improvement.
| Segment | August Growth | September Growth |
|---|---|---|
| Four wheelers (year on year) | 19.7% | 32.4% |
| Two wheelers | 20.5% | 33.5% |
| Three-wheeler registrations | 48.8% | 63.5% |
| Tractors | 2.5% | 14.4% |
Sales rose across all vehicle categories, which suggests discretionary spending picked up after slowing in August. The pickup in tractor sales pointed to stronger rural consumption.
Fuel demand did not follow the same trend:
- Petrol consumption growth eased to 7.9% from 8.2%
- Diesel demand growth eased to 5.6% from 6.8%
Which Industry and Financial Indicators Improved?
Activity improved in both manufacturing and services.
| Indicator | August | September |
|---|---|---|
| Manufacturing PMI | 52.8 | 55.1 |
| Services PMI | 54.1 | 55.2 |
| Core sector output growth | 5.9% | 7.9% (30-month high) |
| Major port cargo traffic growth | 8.4% | 12.7% |
| Non-food credit growth | 19.8% | 21.4% |
| Aggregate deposit growth | 17.6% | 19.4% |
Payment trends were mixed:
- UPI: Transaction volumes grew more than 22% year on year, about the same as in August
- Credit cards: Payments fell 3.1% after growing 8.5% in August, which shows household spending was not equally strong across payment channels
What Do Labour Market Indicators Show?
Employment data gave a mixed picture.
| Indicator | Previous Reading | September Reading |
|---|---|---|
| Naukri JobSpeak Index growth | 13.7% | 1.7% |
| MGNREGA work demand (year on year) | Up 9% in August | Up 36% |
| Urban unemployment rate | 6.8% | 6.9% |
| Urban youth unemployment rate | 18.7% | 19% |
The sharp fall in the JobSpeak Index points to slower white-collar hiring. More demand for work under the Mahatma Gandhi National Rural Employment Guarantee Act may indicate greater stress in rural labour markets.
Why Is Inflation a Concern?
Inflation rose across measures:
- Wholesale inflation: Rose to 11.4% in September from 9.9% in August
- Retail inflation: Reached 5.54% in September, crossing 5% for the first time in the new series
- Policy rate: The Reserve Bank of India raised it to 5.5% from 5.25% earlier this month, its first hike in three years
Rising wholesale prices could hold back growth if higher input costs start affecting manufacturing margins and consumer prices. Economists expect more rate hikes in the coming months as prices rise.
How Is the Eco Pulse Index Built?
The index combines nearly 40 high-frequency measures covering:
- Consumption
- Industry
- Services
- Labour markets
- Trade
- Financial activity
It is designed to give an early indication of changes in economic momentum before official GDP data is released.
Final Outlook
Upcoming data will show whether the recovery in vehicle sales and core sector output holds up against higher borrowing costs and rising input prices. Labour market indicators, especially rural work demand and urban hiring, will also show how widely the pickup in activity is being shared across households.
Source: Moneycontrol
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