Bharat Barometer June'25: India's Economy shows 6% GST growth, 2.1% CPI, 7.58% urban unemployment, strong $1,690M FII inflows

India’s economic landscape in June 2025 showed a continued moderation in overall growth, with mixed signals across different sectors. While services and manufacturing continued to expand and rural indicators remained strong, key areas like GST collection, external trade, and capital markets showed signs of weakening. This edition of Bharat Barometer provides insights into the macroeconomic indicators shaping India’s financial and industrial environment.

Macroeconomic Indicators (Score: 3/5)

• GST Collection: Growth declined to a mid-single-digit level of 6% in June 2025, a significant drop from 16% in May.
• CPI & WPI: The Consumer Price Index (CPI) continued its moderating trend, falling to 2.1%. The Wholesale Price Index (WPI) entered deflationary territory at 0%.
• Unemployment: Urban unemployment saw a decline to 7.58%, while rural unemployment rose to 7.52%.
• PMI Trends: Both Manufacturing PMI (58.4) and Services PMI (60.4) rose and remained in the expansionary zone. The Composite PMI also rose to 61.0

External Sector Trends (Score: 3/5)

• Exports & Imports: Growth in goods exports declined to -2% in May 2025, while goods imports also saw a decline of -2%. Services export growth remained stable at 9%, and services imports saw a decline to 0%.
• FDI Inflows: FDI net inflows turned positive in April after two months of outflows. Data for May and June was unavailable.
• FII Inflows: Foreign Institutional Investor (FII) inflows continued to be healthy in June, reaching $1,690 million.

Government Finances (Score: 3/5)

• Direct Tax Collection: Cumulative gross direct tax collection rose to 5% year-on-year but still lagged behind the estimated GDP growth trend.
• Revenue & Capital Expenditure: Revenue expenditure growth was robust at 41%, while capital expenditure growth moderated to 39% month-on-month but remained healthy.
• Subsidy Payouts: Subsidy payout growth contracted sharply to -37% in May 2025 after a sharp rise in the previous month.

Industrial Activity (Score: 2/5)

• E-Way Bills: E-way bill generation growth remained strong and stable at a high-teen level of 19%.
• Industrial Production: Power generation (-6%) and coal offtake (-6%) continued to decline year-on-year.
• Energy & Materials: Consumption of petroleum products rose marginally to 2%, while steel consumption remained stable at 8%.

Demand & Consumption (Score: 2/5)

• Vehicle Sales: Overall auto registrations moved up marginally, but passenger vehicle sales growth moderated.
• Insurance Premiums: Life insurance premium growth declined by 3%, while non-life growth remained soft at 6%.
• Consumer Sentiment: Both urban (107.8) and rural (118.4) consumer sentiment saw an increase, suggesting improved confidence.

Banking & Money Flow (Score: 3/5)

• M3 Money Supply: Growth remained stable at 10% in June 2025.
• Retail Payments: UPI transaction growth continued to be strong at 32%. IMPS transactions continued to decline, showing a -13% growth.
• SCB Credit & Deposits: Credit growth softened marginally to 9% and lagged behind deposit growth, which remained flat at 10%.
• Fastag Collections: Growth in both value (18%) and volume (15%) of Fastag collections remained stable at mid-teen levels.

Rural Indicators (Score: 2/5)

• Reservoir Storage: Reservoir levels continued to show very strong year-on-year growth at 82%.
• Rural Employment: Rural employment growth remained soft at 3%.
• Agricultural Machinery: Tractor sales growth was flat at a high single-digit level of 10%, while two-wheeler sales saw a marginal revival.
• Fertilizer Sales: Growth in fertilizer sales continued to decline for the third consecutive month but showed a month-on-month improvement.

Capital Markets (Score: 3/5)

• Mutual Funds: Equity mutual fund net inflows rose month-on-month and remained healthy, while the number of net new SIPs remained soft but positive at 1.38 million.
• Stock Market: Trading volume continued to be weak, with a -14% decline, but improved sequentially.
• SIP Contributions: Growth in SIP contributions continued to be strong at 28%.