PHDCCI Economy GPS Index for August 2022 economic activity rejuvenated amidst the festive season: PHD Chamber

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Economic activity has rejuvenated further in August 2022 in comparison to July 2022 due to the onset of festive season despite the ongoing uncertainty due to geo-political developments, said Mr Pradeep Multani, President, PHD Chamber of Commerce and Industry, in a press statement issued here today.

The PHDCCI Economy GPS Index for August 2022 has increased to 141 as compared to 136.1 in July 2022, said Mr Pradeep Multani.

PHDCCI Economy GPS Index captures the momentum in supply side business activity through growth in GST collections, demand side consumer behaviour through volume growth in passenger vehicle sales and sensitivity of policy reforms and impact of domestic and international economic and business environment through the movement of SENSEX at the base year of 2018-19=100, said the Industry Body.

Passenger vehicles growth, which is a significant demand indicator in GPS index, has recorded a sequential growth of 7.9% increasing from 2,93,865 units in July 2022 to 3,17,000 units in August 2022, said Mr. Pradeep Multani.

Though, the gross GST collections in August 2022 recorded a sequential growth of (-)3.6%, the same increased y-o-y by 28% to Rs. 1,43,612 crore in August 2022 as compared to Rs. 1,12,020 crore in August 2021, said Mr. Pradeep Multani. 

The sequential growth of SENSEX (average of daily close) has increased by 7.9% in August 2022 from 54685 points in July 2022 to 58990.5 points in August 2022, said Mr. Pradeep Multani.

Economic recovery so far (Sequential)

 PHDCCI Economy GPS Index2018-19=100August 2021September 2021October 2021November 2021December 2021January2022February 2022March 2022April 2022May2022June 2022July 2022August 2022
116.7113.1127.0125.2123.5133.2129.8133.6140.6128.0131.3136.1141.0

Source: PHD Research Bureau, PHDCCI Economy GPS Index.

The PHDCCI Economy GPS Index at 141 for August 2022 is higher by 24.2 points from the Economy GPS Index for August 2021 at 116.7, said Mr. Pradeep Multani.

 Economic recovery so far (Y-o-Y)

PHDCCI Economy GPS Index2018-19=100August2018August2019August2020August2021August2022
101.291.0390.5116.7141.0

Source: PHD Research Bureau, PHDCCI Economy GPS Index.

PHDCCI Economy GPS Index has been consistently increasing since the last 3 months, said Mr. Pradeep Multani.

Chart 1: GPS Index: Monthly TrendChart 2: Movement of GDP and GPS over the quarters

Source: PHD Research Bureau, PHDCCI Economy GPS Index.

The pace of economic activity is gaining momentum on the back of onset of festive season supplemented by the various structural reforms undertaken by the Government during the last 2 years. 

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Besides, the GDP has recently registered an inspiring growth rate of 13.5% in Q1 FY 2022-23 on the back of improved consumer, business and investor sentiments, rejuvenated demand for contact intensive services, record level of GST collections and railway freight and continuous facilitative efforts and measures of the Government, despite the geo-political scenario over the quarter, thus implying that our fundamentals and macroeconomic indicators are resilient. 

Going ahead, continued handholding by the Government is required to mitigate the impact of recent geo-political developments while maintaining a balance between inflation and economic growth, said Mr. Pradeep Multani.

PHD Chamber of Commerce and Industry (PHDCCI) Economy GPS Index is a composite index of 3 lead economic and business indicators with base year at 2018-19=100, which measures the broad economic and business activity. The PHDCCI Economy GPS Index, based on the monthly values of three high frequency indicators viz., GST collection (Rs. Crore), Passenger Vehicle Sales (units) and SENSEX (daily average), helps to find the direction of the economy. The three broad indicators represent not only demand and supply in the economy but also revenue growth of the government and movement of financial markets in the country. GST collections indicate the momentum of business activity, passenger vehicle sales is a broad indicator of demand activity in the economy and movement of SENSEX indicates the mood of both domestic and foreign investors.

Movement of Economy GPS over the Months

Month/ YearEconomy GPS Index
FY 2018FY 2019FY 2020FY 2021FY 2022FY 2023
April 102.110439.6123.7140.6
May 100.198.150.191.5128.0
June 97.797.375.1107.5 131.3
July72.3100.994.385.6119.7 136.3
August96.8101.291.090.5116.7 141.0
September98.2101.492.4100.2113.1 
October94.999.8102.0109.6127.0 
November92.097.4103.9106.9125.2 
December88.093.7101.0111.9123.5 
January96.7101.4107.1118.5133.2 
February93.698.8103.2118.8129.8 
March97.8105.680.0123.0133.6 

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