Bharat Barometer July'25: India’s economy shows 8% GST growth, 1.6% CPI, 7.52% urban unemployment, weak exports

India’s economic landscape in July 2025 displayed a mix of cautious optimism and persistent challenges. A strong revival in rural indicators, supported by a healthy monsoon and rising employment, was a major highlight. However, certain key areas, such as the external sector and industrial activity, showed signs of weakness. Capital markets remained volatile, with trading volumes continuing their contraction, while positive movements were seen in mutual fund inflows and new SIP registrations. This edition of Bharat Barometer provides insights into the macroeconomic indicators shaping India’s financial and industrial environment.

Macroeconomic Indicators (Score: 4/5)

• GST Collection: Growth inched up to 8% in July 2025, a modest increase from 6% in June 2025.
• CPI & Core CPI: CPI continued to moderate, reaching 1.6% (vs. 2.1% in June 2025), while Core CPI remained stable at 4.0%.
• PMI Trends: The Manufacturing PMI rose further to 59.1, and the Services PMI also increased to 60.5. The Composite PMI stood at 61.1, indicating continued expansion.
• Unemployment: Both urban and rural unemployment saw a decline, improving to 7.52% and 6.35% respectively.

External Sector Trends (Score: 3/5)

• Exports & Imports: Growth in goods exports softened to 0% in June 2025, while imports showed a significant decline of 4% year-on-year.
• Services Trade: Services exports grew at a healthy 11%, while services import growth picked up to 6%.
• FDI Inflows: FDI inflows remained positive but fell drastically in May 2025 to $35 million.
• FII Inflows: Foreign Institutional Investor (FII) flows turned negative in July 2025, with outflows of $2,052 million, after three consecutive months of positive inflows.

Government Finances (Score: 4/5)

• Direct Tax Collection: Cumulative gross direct tax collection slipped into a negative growth zone at -1% in June 2025.
• Revenue & Capital Expenditure: Revenue expenditure growth was strong at 37% in June 2025, while capital expenditure also maintained robust growth at 44%.
• Subsidy Payouts: Subsidy payout degrowth continued for the second consecutive month.

Industrial Activity (Score: 2/5)

• E-Way Bills: E-way bill generation growth accelerated strongly to 26% in July 2025, up from 19% in June 2025.
• Industrial Production: Power generation degrew by 1% and coal offtake by 9% year-on-year.
• Energy & Materials: Consumption of petroleum products degrew by 4%. Finished steel consumption growth moderated but remained strong at 7%.

Demand & Consumption (Score: 1/5)

• Vehicle Sales: Total vehicle registrations degrew by 4% in July 2025.
• Insurance Premiums: Life insurance premium growth turned positive at 22% in July 2025.
• Consumer Sentiment: Urban sentiment showed continued strength, rising to 109.5, while rural sentiment also ticked up slightly to 118.6.

Banking & Money Flow (Score: 4/5)

• M3 Money Supply: Growth remained stable at 10% in July 2025.
• Retail Payments: UPI transaction growth continued to be strong at 35%.
• SCB Credit & Deposits: Credit growth inched up to 10.0%, while deposit growth slightly exceeded it at 10.2%.

Rural Indicators (Score: 4/5)

• Reservoir Storage: Reservoir levels showed very strong year-on-year growth at 83% in July 2025, boosted by a healthy monsoon.
• Agricultural Machinery: Tractor sales growth rose marginally to 7%, while two-wheeler sales saw a slight improvement.
• Rural Employment: Rural employment growth continued its upward trend, reaching 4%.
• Fertilizer Sales: Fertilizer sales growth revived to 13% after three consecutive months of muted demand.

Capital Markets (Score: 3/5)

• Mutual Funds: Equity mutual fund net inflows rose to 15% in July 2025, while net new SIP registrations were positive for the third consecutive month, rising to 2.59 million.
• Stock Market: Trading volume continued its downward trend, contracting by 24% for the ninth consecutive month.
• SIP Contributions: Growth in SIP contributions moderated slightly to 22% but remained strong.
• FIIs: FII outflows were a persistent headwind, turning negative again in July.