Bharat Barometer Dec'25: CPI & WPI Rise Marginally; GST Growth Returns; Domestic Activity Mixed Amid Weak External Flows

India’s economy in December 2025 showed mixed signals, with modest improvement in formal sector collections and domestic demand, while external flows and industrial activity exhibited softness. Inflation remained subdued, and rural indicators continued to show resilience. Government capital spending stayed firm, highlighting the continued focus on public investment, whereas net FDI and FII flows reflected external sector weakness.

Macroeconomic Indicators (Score: 2/5)

• GST Collection: Growth rebounded to 1% YoY in December after a sharp contraction in November, reflecting moderate recovery in formal sector activity.
• CPI & WPI: Consumer inflation (CPI) inched up to 1.3%, while wholesale inflation (WPI) remained low at 1%, indicating a contained price environment. Core CPI stayed stable at 4%.
• Unemployment: Urban unemployment eased to 6.75%, while rural unemployment rose to 6.99%, pointing to divergent labor market trends.
• PMI Trends: Manufacturing PMI softened to 55.0, and services PMI declined to 58.0. The composite PMI moderated to 57.8, signaling slower, yet continued expansion.

External Sector Trends (Score: 1/5)

• FII Flows: Net FII outflows persisted at USD -2,515 million, indicating cautious foreign investor sentiment.
• FDI & Trade Data: Net FDI remained negative for the second consecutive month at -1,545 million USD. Exports of goods and services slowed sharply, while imports of goods rose marginally.

Government Finances (Score: 2/5)

• Direct Tax Collection: Cumulative direct tax growth rose modestly to 6%, reflecting gradual improvement in revenue mobilisation.
• Revenue & Capital Spending: Revenue expenditure growth softened in December, while capital expenditure showed negative YoY growth at -14%, though still providing support to infrastructure spending.
• Subsidy Payments: YoY subsidy outflows remained strong at 37%, sustaining support for targeted sectors.

Industrial Activity (Score: 2/5)

• E-Way Bills: Growth recovered to 24% in December, following a sharp dip in October, suggesting stabilising goods movement.
• Energy & Core Sectors: Power generation remained subdued at -5% and coal offtake fell further by -1%, indicating lingering stress in energy supply.
• Steel Consumption: Growth softened to 3%, reflecting muted demand in construction and manufacturing.

Demand & Consumption (Score: 4/5)

• Vehicle Sales: Overall registrations rose 16% YoY, while passenger vehicle sales grew 20%, indicating resilient auto demand.
• Insurance Premiums: Life insurance premium collections surged to 39%, whereas non-life premiums remained moderate at 14%.
• Consumer Sentiment: Rural sentiment strengthened to 121.5, and urban sentiment moderated slightly to 112.8, both remaining healthy.
• Travel & Leisure: Airport passenger traffic and foreign tourist arrivals maintained positive trends, underscoring recovery in mobility.

Banking & Money Flow (Score: 4/5)

• Money Supply (M3): Growth accelerated to 12%, reflecting strong liquidity conditions.
• Credit & Deposits: Bank credit rose to 15%, outpacing deposits, which grew 13%.
• Retail Payments: UPI growth moderated to 29%, IMPS fell further to -14%, while Fastag collections slowed to near zero (value: 11%, volume: 0%).

Rural Indicators (Score: 4/5)

• Reservoir Storage: Live storage levels rose 8% YoY, ensuring adequate water supply.
• Rural Employment: Growth strengthened to 7%, supporting rural income.
• Agricultural Machinery: Tractor sales increased 35% YoY, while 2W sales surged 36%, reflecting robust rural cash flows.

Capital Markets (Score: 3/5)

• Mutual Funds: Net equity inflows fell to -32%, highlighting cautious retail sentiment.
• Trading Volume: NSE trading volumes grew 45% YoY, pointing to improving market activity.
• SIP Contributions: SIP inflows remained stable at 17%, while net new SIP registrations declined to 0.89 million, showing slightly lower retail participation.
• Market Sentiment: Mixed domestic momentum and weak FII/FDI flows underscore a cautious outlook, despite firm local liquidity and retail interest.