‘Showing great strength’: PHDCCI’s GPS Index on the Indian economy increases 14.1% on-year

PHD Chamber of Commerce and Industry’s (PHDCCI’s) GPS Index for July went up from 136.1 in July 2022 to 155.3 in July 2023, recording an increase of 14.1 per cent year-on-year. The GPS Index captures the momentum in supply side business activity.

The commerce chamber said that the GPS Index has shown a steady momentum despite global headwinds such as high inflation and the uncertainties arising out of the Russia-Ukraine war.

PHDCCI’s multidimensional index of three indicators include GST collection, passenger vehicle sales, and the Sensex that helps it gauge the direction of the economy, much like the Global Positioning System aka GPS determines the position of an object to give direction to a vehicle. Changes in GST collections determine the momentum of businesses, while the value of Sensex reflects the broad outlook of policy stimulus and the mood of the economy and passenger vehicle sales indicate the demand conditions in the country.

All the three indicators have shown remarkable improvement since the last few years. The Index for GST collections stood at 168.2, passenger vehicle sales at 112.7 and Sensex at 184.8 in July 2023 as compared to 151.8, 104.4 and 151.9 respectively in July 2022.

“The high growth of Economy GPS indicates that the economy is showing great strength and moving ahead in the right direction,” said PHDCCI President Saket Dalmia.

The GPS Index expanded by 19.2 points in the month of July as compared to the same period previous year. There has been a steady improvement from July 2022 to July 2023 with an expansion of 16.4, 24.3, 31.9, 18.7, 15.5, 13.2, 11.8, 14.5, 15.2, 14.4, 17.9, 18.4 and 19.2 in the months July 2022, August 2022, September 2022, October 2022, November 2022, December 2022, January 2023, February 2023, March 2023, April 2023, May 2023, June 2023 and July 2023 respectively as compared to its corresponding values.

PHDCCI said that the index is an indication that a higher economic growth trajectory is expected to be attainable through continued and calibrated policy measures. “The robust policy announcements by the government resulted in a strong, sustainable and higher growth trajectory in the recent years,” it said.

India’s GDP growth of 6.1 per cent, despite global headwinds, is encouraging but the industry needs some hand-holding, it said. While the growth of the agriculture sector is inspiring, there has to be increased focus on the manufacturing sector. The drivers of household consumption should be strengthened and further measures need to be taken to ensure ease of doing business.

“At this juncture, the government should continuously handhold the industry with a major focus on manufacturing to achieve a higher and a more sustainable economic growth trajectory to create new avenues for job creation and competitiveness of the enterprises at the global level. The ease of doing business at the factory level with  decriminalisation of the minor offences would help build confidence of the entrepreneurs and thus would make the investments landscape more conducive to attract even a greater chunk of foreign investments,” it added.

Also read: GST collection in July stands at over Rs 1.65 lakh crore; records 11% on-year growth

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