It Was A Festive October: India Shopped, Celebrated and Made Money

October was a month of celebrations for India, and the numbers suggest that the festive cheer extended well beyond homes, markets and shopping centres. From record digital payments and automobile sales to a sharp rise in GST collections, several indicators pointed to strong consumer spending as the festive season gathered momentum.

The unified payments interface (UPI) processed a record 25.47 billion transactions worth Rs 31.53 lakh crore in October, while passenger vehicle sales crossed the five-lakh mark for the first time. Gross goods and services tax (GST) collections surged 22.9% year-on-year to Rs 2.31 lakh crore, providing another indication of the strength of economic activity.

The festive period also brought some relief to household budgets.

The Centre and several state governments announced dearness allowance (DA) increases for government employees and pensioners, while a correction in gold prices offered buyers some respite after a sharp rally earlier in the year.

UPI transactions cross 25 billion for the first time

India’s digital payments ecosystem recorded a major milestone in October, with UPI transactions crossing 25 billion in a single month for the first time.

According to data from the National Payments Corporation of India (NPCI), UPI processed 25.47 billion transactions worth Rs 31.53 lakh crore during the month. Transaction volumes increased 23% from October 2025 and 5.8% from September 2026, when the platform recorded 24.07 billion transactions.

The value of transactions rose 16% year-on-year and 7.4% month-on-month. October also marked the first time that the monthly transaction value crossed Rs 30 lakh crore.

The momentum was visible in daily averages as well. UPI processed an average of 822 million transactions a day, while the average daily transaction value crossed Rs 1 lakh crore for the first time, reaching about Rs 1.02 lakh crore.

The timing is significant. October coincided with heightened festive shopping, online sales and purchases of consumer goods, apparel and other discretionary items. UPI’s growing use for everyday payments also contributed to the record numbers.

The figures underline how digital payments have become an integral part of India’s consumption economy, connecting large online purchases with small transactions at neighbourhood shops.

Diwali brings record sales for carmakers

The festive season proved particularly strong for the automobile industry, with passenger vehicle sales reaching an unprecedented level in October.

Passenger vehicle sales in India crossed 5.25 lakh units during the month, setting a new monthly record. Carmakers benefited from festive purchases, improved affordability following GST rate cuts introduced in September and demand for both cars and sport utility vehicles.

Maruti Suzuki India reported its highest-ever monthly sales of 2,76,120 units in October, an increase of around 25% from 2,20,894 units a year earlier.

Other major manufacturers also reported strong sales, reflecting demand across multiple vehicle categories. Hyundai Motor India was among the companies that benefited from the festive-season pickup.

The performance suggests that households continued to make big-ticket purchases despite concerns about inflation, elevated borrowing costs and global economic uncertainty.

Automobile sales are an important indicator of consumer confidence because buying a car involves a substantial financial commitment. Strong sales during the festive season can also support activity across the wider automobile ecosystem, including dealerships, component manufacturers, logistics companies and vehicle financiers.

However, the real test will be whether demand remains strong after the festive period, when seasonal purchases typically moderate.

GST collections jump 23% as consumption picks up

The government’s GST collections provided another indication of the strength of economic activity in October.

Gross GST revenue rose 22.9% year-on-year to Rs 2.31 lakh crore, according to data released on November 1. The increase came as festive purchases, movement of goods and business transactions gathered pace.

Collections from domestic transactions increased 15.8% to around Rs 1.59 lakh crore, while revenue from imports rose 42.2% to Rs 72,246 crore.

After adjusting for refunds, net GST collections stood at about Rs 2.03 lakh crore, up 25.6% from a year earlier.

The strong revenue performance is significant because GST collections reflect activity across several parts of the economy, including manufacturing, trade, transportation and retail.

October’s numbers also came after the implementation of GST rate rationalisation in September. The continued increase in collections suggests that the changes had not prevented the tax system from recording strong revenue growth during the festive period.

However, GST collections alone do not provide a complete picture of household consumption. Import values, compliance levels and the composition of economic activity also influence the numbers.

Even so, the latest data offered a positive signal at the beginning of the December quarter, with several high-frequency indicators pointing towards resilient domestic demand.

DA hikes offer relief to government employees

The festive season also brought additional income support for government employees and pensioners. The Union Cabinet approved a three-percentage-point increase in dearness allowance for central government employees and dearness relief for pensioners, taking the rate from 60% to 63% of basic pay or pension, as applicable. The increase was effective from July 1, 2026.

The revision is expected to benefit about 48.54 lakh central government employees and 68.71 lakh pensioners. The government estimated the combined annual impact on the exchequer at Rs 10,016.10 crore.

Several state governments also announced DA revisions around the festive period.

Tamil Nadu announced a three-percentage-point increase, taking DA from 60% to 63% for state government employees, teachers and pensioners. Chhattisgarh, meanwhile, announced a two-percentage-point increase for state employees and pensioners, taking the rate from 58% to 60%, effective November 1.

These increases provide some relief against the impact of inflation on household budgets. They can also support consumption by increasing the disposable income available to eligible employees and pensioners.

The additional payments may be used for festive purchases, household expenses, debt repayment or savings. The extent to which they translate into higher consumer spending, however, will depend on individual financial circumstances.

Gold price correction offers buyers some relief

Gold was another important part of the festive spending story, although its role was different from that of digital payments and automobile sales.

After a sharp decline in September, gold prices remained relatively range-bound during much of October before another correction towards the end of the month.

According to the World Gold Council, domestic gold prices fell 4.8% in September to Rs 1,47,613 per 10 grams, while international prices declined 8.5%. Domestic prices remained around 1% lower at mid-October compared with the end of September.

The subsequent correction offered some relief to jewellery buyers ahead of the peak festive and wedding season. Between October 16 and October 27, the benchmark price of 24-carat gold fell by nearly Rs 5,000 per 10 grams.