India’s economic activity growth surged to an eight-month high of 10.1% in October, up from 6.6% in September, despite an unfavorable base effect, according to a report released on Thursday.
The growth momentum was driven by the end of the monsoon season, which positively impacted sectors such as mining and electricity. Additionally, strong festive season demand boosted vehicle registrations, fuel consumption, and air travel, while exports witnessed a significant surge, said credit rating agency ICRA.
“The early data for November appears upbeat, with a base-effect-led rise in electricity demand growth and a continued festive boost in vehicle registrations,” the report noted.
Economic activity growth improved in 10 of the 16 indicators tracked. The ICRA ‘Business Activity Monitor’ rose by 9.9% month-on-month in October, outperforming the 6.5% growth recorded in October 2023, partly due to the early onset of the festive season.
This represents the highest sequential growth in any month since March 2023 (+10.5%).
As per Vahan data, average daily vehicle registrations increased to 108,400 units during November 1-18, surpassing the previous full-month peak average of 96,400 units as well as 92,000 units in November 2023 and October 2024. The rise was primarily driven by festive season demand, which concluded on November 13.
ICRA anticipates that daily average vehicle registrations will normalize by the end of November.
Furthermore, electricity demand growth improved to 3.2% during November 1-17, up from 1.1% in October, partly supported by a favorable base effect.
Non-oil exports also saw a significant uptick, growing by 25.6% in October compared to 6.8% in September 2024. This increase was led by sectors such as electronic goods, engineering goods, chemicals, and readymade garments.
“These trends reinforce ICRA’s expectations of a pick-up in GDP growth in Q3 FY2025 compared to H1 FY2025,” the report concluded.
(Inputs from IANS)