India's May Barometer: Economy shows 16% GST growth, 2.8% CPI, 8.39% urban unemployment, strong $2,344M FII inflows

India’s economic landscape in May 2025 showcased a mix of positive and negative signals. While GST collection grew strongly and FII inflows remained healthy, some sectors experienced moderation. PMI trends were mixed, and rural indicators showed a softening trend. 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 gained strength, accelerating for the third consecutive month to 16% in May 2025.
• CPI & Core CPI: The Consumer Price Index (CPI) softened to 2.8% (vs. 3.2% in Apr-25), while Core CPI remained stable at 4.2%.
• WPI: Data was unavailable for May 2025, but was last recorded at 1% in April 2025.
• Unemployment: Urban unemployment increased to 8.39%, while rural unemployment saw a significant decline to 6.06%.
• PMI Trends: The Manufacturing PMI softened to 57.6, while the Services PMI was stable at 58.8. Both, however, remained in the expansionary zone. The Composite PMI moderated to 59.3.

External Sector Trends (Score: 3/5)

• Exports & Imports: Growth in goods exports softened to 9% in April 2025, while imports grew by a strong 19%. Services export growth moderated to 8%.
• FDI Inflows: FDI outflows persisted in February and March 2025. Data for April and May 2025 was unavailable.
• FII Inflows: Foreign Institutional Investor (FII) inflows continued to be healthy in May 2025, rising to $2,344 million.

Government Finances (Score: 3/5)

• Direct Tax Collection: Cumulative gross direct tax collection declined by 3% year-on-year after a strong performance in March 2025.
• Revenue & Capital Expenditure: Revenue expenditure growth declined to -6% in April 2025, while capital expenditure growth remained strong at 61%.
• Subsidy Payouts: Subsidy payout growth rose for the first time in five months to 49% in April 2025.

Industrial Activity (Score: 2/5)

• E-Way Bills: E-way bill generation growth stayed strong at 19% but moderated marginally in May 2025.
• Industrial Production: Power generation and coal offtake continued to decline year-on-year, by 8% and 6% respectively.
• Energy & Materials: Consumption of petroleum products saw a marginal growth of 1%. Finished steel consumption growth also rose marginally to 9%.

Demand & Consumption (Score: 3/5)

• Vehicle Sales: Total vehicle registrations grew marginally to 5% in May 2025.
• Insurance Premiums: Life insurance premium growth continued to rise, reaching 13%, while non-life insurance growth softened to 6%.
• Consumer Sentiment: Urban consumer sentiment was stable at 106.8, while rural sentiment rose to 115.5.

Banking & Money Flow (Score: 2/5)

• M3 Money Supply: Growth softened to 8% in May 2025.
• Retail Payments: UPI transaction growth softened marginally but remained strong at 33%. IMPS transactions continued their decline, with a negative growth of 13%.
• SCB Credit & Deposits: Credit and deposit growth both softened marginally to 10%.
• Fastag Collections: Growth in both the value and volume of Fastag collections continued to accelerate to 20% and 16% respectively.

Rural Indicators (Score: 2/5)

• Reservoir Storage: Reservoir levels continued to show very strong year-on-year growth at 33% in May 2025.
• Rural Employment: Growth in rural employment softened to 3% in May 2025.
• Agricultural Machinery: Tractor sales growth softened to a single-digit level of 8%.

Capital Markets (Score: 3/5)

• Mutual Funds: Equity mutual fund net inflows continued to decline month-on-month, falling to -45%.
• SIP Contributions: Growth in SIP contributions continued to moderate, but was still at a healthy 28%. The number of new SIPs registered turned positive in May 2025 at 1.65 million after four consecutive months of decline.
• Stock Market: Trading volume year-on-year growth was weak, with a decline of 9%.
• FIIs: FII inflows continued to be healthy in the month.