The E-way bills, or electronic permits, generated by businesses for transporting goods within and across states, touched their second-highest level in December in 24 months, growing 17.6 per cent year-on-year to reach 112 million, according to data released by the Goods and Services Tax Network (GSTN) portal.

       This marked a significant increase from November's five-month low of 101.8 million.

       E-way bills are mandatory for the movement of consignments worth more than Rs 50,000 and are, therefore, an early indicator of demand and supply trends in the economy. This often reflects in macroeconomic indicators with a lag.

       The momentum in E-way bill generation in December is expected to show up in the GST collection data for January 2025, which will be released on February 1.

       An increase in E-way bills indicates higher movement of goods. Furthermore, as the end of the quarter approaches, there is typically a rise in sales, contributing to the higher volume of E-way bills.

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       It is to be noted that E-way bills peaked at 117.2 million in October due to the festive season. Pratik Jain, partner at PwC, said the sequential rise in the number of E-way bills issued is a positive sign and indicates that consumption in December was higher than in November.

       "It would logically mean that the GST collection in January (for transactions pertaining to December) should be higher than the previous month," Jain said.

       Meanwhile, Bipin Sapra, tax partner at EY India, said: "The increase in E-way bill numbers is a harbinger of increased manufacturing activity, which is a sign of economic recovery and growth. With three months to go for the financial year to close, this growth should get the GDP growth back on track."

       However, the E-way bill performance contrasts with the HSBC India manufacturing purchasing managers' index (PMI), which indicated a slowdown in growth for December, dropping to a 12-month low of 56.4, as reported by S&P Global.

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