E-way bills drop to five-month low in November after festive peak
- Experts suggest that the decline in e-way bill generation in November stem from high inventory levels accumulated during the festival months.
The issuance of electronic permits, or e-way bills, required for the shipment of goods within and across states, fell to a five-month low in November following a record high in October, according to official data. The decline suggests businesses may be taking a pause after months of inventory clearance.
In November, businesses generated 101.8 million e-way bills, a notable drop from October’s historic 117.2 million. However, this marks a significant improvement over the 87.5 million bills issued in November 2022, according to data from the Goods and Services Tax Network (GSTN).
The surge in e-way bill generation from July through October was driven by the festival season, which typically ramps up in August and September. November's decline reflects a cooling off after this seasonal spike.
E-way bills serve as a critical indicator of the movement of raw materials, intermediates, and finished goods across India. Together with Goods and Services Tax (GST) collections, they provide policymakers with valuable insights into consumption patterns, which are pivotal as preparations for the FY25 Union Budget gather pace.
GST collections for the Union and state governments rose to ₹1.82 trillion in November, an 8.5% increase year-on-year. However, this is slightly lower than October’s ₹1.87 trillion, the second-highest figure recorded since the GST regime was introduced in 2017. The all-time peak of ₹2.1 trillion was achieved in April.
GST revenue closely tracks e-way bill activity, as higher freight volumes often correlate with higher tax inflows. Experts suggest the November drop in e-way bill generation may be linked to inventory build-up during the festival season.
“The reduction in the volume of e-way bills generated could potentially be on account of up-stocking in the earlier festival months leading to high inventories across sectors,” explained M.S Mani, partner at Deloitte India.
India’s festival calendar begins with Onam and Ganesh Chaturthi, runs through Christmas, and peaks with Diwali, which typically falls in October or November. Historical data shows a similar dip in e-way bill generation after Diwali, including in November 2023.
Broader economic trends
Other high-frequency indicators also point to shifting trends.
The HSBC India Manufacturing Purchasing Managers’ Index (PMI) moderated to 56.5 in November from 57.5 in October, signalling a softer pace of expansion. According to S&P Global, which surveyed executives at 400 manufacturing firms, producers raised selling prices at the fastest pace since October 2013, potentially weighing on demand.
Meanwhile, rural demand offered mixed signals. Data from the Federation of Automobile Dealers highlighted a robust 15.8% rise in two-wheeler sales and a 29.8% surge in tractor sales in November compared to the prior year. However, passenger vehicle and commercial vehicle sales contracted by 13.7% and 6%, respectively, reflecting urban demand moderation.
The Reserve Bank of India (RBI), in its latest monetary policy statement, highlighted an uptick in rural demand but raised concerns about a slowdown in urban consumption driven by high inflation. Elevated inflation erodes disposable income, curbing private consumption and weighing on real Gross Domestic Product (GDP) growth.
Retail inflation stood at 6.21% in October, breaching the RBI’s tolerance range. The central bank has emphasized that a strong rabi harvest will be crucial to easing food price pressures and sustaining broader economic growth.
Catch all the Business News , Economy news , Breaking News Events andLatest News Updates on Live Mint. Download TheMint News App to get Daily Market Updates.
Business NewsEconomyE-way bills drop to five-month low in November after festive peak
First Published:11 Dec 2024, 12:21 PM IST
- Top Gainers
- Top Losers
- 52 Week High