Bharat Barometer Oct'25: CPI at 0.3%, GST Growth Cools to 5%; Domestic Momentum Eases as Capex Drive Holds Steady

India’s economy in October 2025 displayed a nuanced picture of moderating growth impulses alongside persistent strengths in domestic demand and public investment. While key activity indicators like industrial production and consumption showed signs of softening, robust government capital expenditure and stable rural demand provided a counterbalance. The external sector showed tentative signs of improvement, but global uncertainties continue to loom.

Macroeconomic Indicators (Score: 3/5)

• GST Collection: Growth softened to 5% in October 2025, indicating a moderation in formal sector economic activity.
• CPI & WPI: Consumer inflation (CPI) decelerated sharply to 0.3%, reflecting a deeply benign price environment. Wholesale inflation (WPI) remained in deflationary territory at -1%.
• Unemployment: Urban unemployment improved significantly to 7.37%, while rural unemployment rose to 7.55%, indicating a rebalancing in labor markets.
• PMI Trends: Manufacturing PMI improved to 59.2, signaling strong factory activity. Services PMI, however, moderated to 58.9. The composite PMI stood at a healthy 60.4, confirming continued economic expansion.

External Sector Trends (Score: 3/5)

• FII Flows: A notable shift occurred as FII flows turned positive, with net inflows of USD 1,656 million, breaking a three-month streak of outflows.
• FDI & Trade Data: Net FDI inflows turned negative, pausing after a period of strength. Detailed goods and services trade data for October is awaited, but the reversal in FII sentiment is a positive development for the capital account.

Government Finances (Score: 2/5)

• Direct Tax Collection: Cumulative growth is expected to remain in positive territory, building on September’s 3% growth, though the pace of improvement is gradual.
• Revenue & Capital Spending: Revenue expenditure decline likely softened further, while capital expenditure growth normalized from the previous month’s high base but is expected to remain robust, underscoring the continued focus on public investment.
• Subsidy Payments: The YoY change is anticipated to have moderated after the sharp 44% rise in September.

Industrial Activity (Score: 1/5)

• E-Way Bills: Growth plummeted to 8%, a significant slowdown from the 21% seen in September, pointing to weaker goods movement.
• Energy & Core Sectors: Power generation contracted by -11% and coal offtake fell by -6%, highlighting significant pressure on the industrial energy complex.
• Steel Consumption: Growth softened to 5%, indicating a moderation in construction and manufacturing demand.

Demand & Consumption (Score: 2/5)

• Vehicle Sales: Overall vehicle registrations saw a sharp spike of 40% YoY, though this may be influenced by base effects and festive seasonality. Passenger vehicle sales data is awaited.
• Insurance Premiums: Life insurance premium growth was stable at 12%, while non-life premium growth was muted at 0%.
• Consumer Sentiment: Rural sentiment improved to 117.2, and urban sentiment moderated slightly to 107.3, but both remained at healthy levels.
• Travel & Leisure: Air passenger traffic data for October is awaited, following a period of subdued performance.

Banking & Money Flow (Score: 2/5)

• Money Supply (M3): Growth remained stable at 11%, indicating consistent systemic liquidity.
• Credit & Deposits: Credit growth edged up to 11%, marginally outpacing deposit growth, which held steady at 10%.
• Retail Payments: UPI transaction growth softened to 25%, while IMPS transactions continued to decline (-14%).
• Fastag Collections: Both value and volume growth decelerated sharply to 9% and 5% respectively, aligning with the slowdown in e-way bill generation.

Rural Indicators (Score: 3/5)

• Reservoir Storage: YoY growth remained steady at 5%, ensuring adequate water resources for the rabi season.
• Rural Employment: Growth held steady at 4%, indicating stable demand for rural labor.
• Agricultural Machinery: Tractor sales growth remained strong at 14%, albeit cooling from the exceptional 43% in September, reflecting solid rural cash flows.
• Two-Wheeler Sales: Data for October is awaited, following a robust 11% performance in the previous month.

Capital Markets (Score: 3/5)

• Mutual Funds: Equity mutual fund net inflows declined further by -41% MoM, reflecting cautious investor sentiment.
• Trading Volume: NSE trading volumes turned positive, growing 18% YoY after 11 consecutive months of decline, indicating a revival in market activity.
• SIP Contributions: Growth in SIP inflows moderated to 17%, but net new SIP registrations increased to 1.52 million, marking the sixth consecutive month of positive additions and demonstrating the resilience of retail participation.
• Market Sentiment: The improvement in FII inflows and trading volumes points to a more positive, though still cautious, market sentiment.