Cars are pictured at an assembly line inside the manufacturing plant of Renault Nissan Automotive India in Oragadam in the southern state of Tamil Nadu, India.
Credit: Reuters File Photo
New Delhi: Decline in automobile sales in the first five months of the current financial year indicate weakness in urban consumption even as India’s exports remain muted due to weak global demands, the Union Finance Ministry said on Thursday.
“Urban consumption shows some signs of weakness, evident in the decline in automobile sales in the first five months of the current financial year compared to the same period last year,” the ministry said in its monthly economic review.
As per the latest industry data released by the Society of Indian Automobile Manufacturers (SIAM), passenger vehicle sales declined by 1.8 per cent year-on-year in August. The Federation of Automobile Dealers Association (FADA) data shows a sharper contraction of 4.5% during the month under review.
The Finance Ministry also flagged concern over the muted exports. India’s export of goods, even after accounting for the decline in the prices of petroleum products, has grown negligibly in the first five months of the year compared to the same period last year. “It reflects weak global demand and India’s persisting challenges with scaling up production, productivity and competitiveness,” the ministry said.
The value of goods exports during April-August 2024 period stood at $178.68 billion, marginally higher than $176.67 billion recorded during the corresponding period of the last year, while imports jumped to $295.32 billion in the first five months of the current fiscal from $275.83 billion recorded in April-August 2023, as per the latest data released by the Ministry of Commerce and Industry.
The Finance Ministry expressed hope that the government capital expenditure, which witnessed contraction in April-June quarter due to Lok Sabha elections, is gathering pace.
According to the ministry, the Q1 data also indicate pick up in the private investments. “Most high-frequency indicators on the supply side suggest continuing economic expansion in the current quarter. Steady growth in GST collections, expansionary trends in purchasing managers’ indices and growth in air and port cargo indicate vigorous economic activity,” it said.
India’s GDP growth slowed to 6.7 per cent in the first quarter of the current financial year from a robust 8.2 per cent expansion recorded in 2023-24. The ministry has pegged the GDP growth for the current financial year in the range of 6.5 to 7 per cent.
“As public expenditure picks up and the rural economy strengthens, the overall growth is expected to remain steady in the subsequent quarters,” the Finance Ministry said.