November Demand Rebounds: E-Way Bills, PMI, and Auto Sales Show Strength

An increase in e-way bills issued for goods movement within and across states indicates an uptick in economic activity in November after a brief slowdown in October, according to GSTN data.

Businesses generated 129.8 million e-way bills in November—the second-highest ever—marking a 2.4% rise from October’s 126.8 million. The pickup in goods movement suggests GST collections may strengthen in December, following a modest 0.7% rise in November to ₹1.7 trillion amid significant GST rate cuts from 22 September and weak external demand impacting manufacturing.

The government expects any short-term revenue softness from the tax cuts to be offset by stronger consumption, ultimately supporting revenues.

Data from the statistics ministry showed manufacturing output surged 9.1% and household consumption grew 7.9% in the September quarter, helping push GDP growth to 8.2%. Policymakers remain confident the economy will grow at 7% or more this fiscal.

Post-festive demand signal

Rajat Mohan, senior partner at AMRG & Associates, said that since the September GST cuts reduced tax incidence across categories and October saw high festive demand, a further rise in November signals strengthening baseline consumption. This supports the view that calibrated GST rationalisation can stimulate incremental demand and aid medium-term revenue stability, he added.

PMI trends

The HSBC India Manufacturing PMI—another key high-frequency indicator—showed solid industry performance in November. Although output and new order expansion slowed to the weakest since February, the index remained robust at 56.6, well above the neutral 50 mark and its long-term average of 54.2.

Auto retail gains

Separately, the Federation of Automobile Dealers Associations (FADA) reported that retail vehicle sales rose to 3.3 million units in November, up 2.14% year-on-year.

FADA said the three-month outlook for auto retail remains strongly positive, driven by GST 2.0 tax rationalisation, healthy enquiry levels, and improving rural indicators. Nearly 74% of dealers expect growth, reflecting broad-based optimism across segments.

Source: Live Mint