oppn parties There Is No Correlation Between Good GST Collection In November And Reversal Of Economic Slowdown

News Snippets

  • PM Modi tells BJP workers that India is in for a long battle against the coronavirus and there is no scope to feel tired or defeated
  • PM Modi asks ministers to focus on exports and new areas and sectors
  • PM Modi asks ministers to prepare business continuity plan post the lifting of the lockdown
  • Corona cases in India cross 4000 and the death toll stands at 124
  • The government decides to double the testing of corona suspects from 10000 now to 20000 in the next three days
  • Flipkart assures employees that there will be no job or salary cuts due to the COVID-19 pandemic
  • Although it was obvious, but the government still clarifies that there is no need to switch off appliances and only lights need to be switched off on April 5 at 9pm after confusion in the minds of some people
  • PM Modi and President Trump decide "to deploy full strength of (Indo-US) partnership" to fight against COVID-19
  • 17 states have reported 1023 cases of coronavirus linked to the Tablighi Jamaat, which translates to 30% of all positive cases in India
  • The government says people should not use alcohol-based hand sanitizers before lighting diyas or candles on April 5
  • The railways say there is no certainty yet when services will resume after the lockdown and a final decision will be taken in the next few days
  • As coronavirus cases multiply in Assam, six north-east states seal their borders with the state
  • Power System Operation Corporation Ltd. (POCOSO) putting all systems and protocols in place at war-footing to ensure there is no grid failure due to reduction in demand on April 5 at 9 pm
  • Power ministry scotches rumours that the power grid might fail due to the 9-minute blackout called by PM Modi on Sunday, April 5
  • Centre asks people to wear home-made masks if it is absolutely essential for them to step out of homes
26 nurses and 3 doctors test positive for COVID-19 at Wockhardt Hospital in Mumbai, facility cordoned off, no entry or exit permitted from the hospital
oppn parties
There Is No Correlation Between Good GST Collection In November And Reversal Of Economic Slowdown

By Ashwini Agarwal

GST collection for November have shown an increase of 8.5 percent and have crossed the Rs 1 lakh crore mark after three successive months of collections below Rs 1 lakh crore and two successive months of slippage. But there is not much that can be read into the increased collection about the revival of the economy. The simple fact is that collections in November were up due to sales of white goods, cars, garments and footwear, among other things, traditionally purchased by the people in the festival season of Durga Puja and Diwali which fell in October this year. It was also in part due to better compliance after easing of some the rules in the last meeting of the GST Council.

The collections for November this year were Rs 1,03,492 crore which was 8.5 percent more than the Rs 95,380 crore collected in October this year. After a collection of Rs 98,202 crore in August this year, September and October both saw negative growth. The GST collection in those months reflected the economic slowdown which was confirmed by other figures like plummeting sales of cars and two-wheelers and white goods. But the November figures are not an indication of the revival of the economy. We will have to wait for the collection figures for December and January to know about that. If those months also show positive growth, and if manufacturing shows an uptrend, only then can we say that the slowdown is being reversed.

We have seen that the last quarter showed growth dipping to 4.5%, the lowest in 6 years. Manufacturing activity in eight core infrastructure industries contracted by 5.8 percent. These are disturbing figures. Although they do not say that the economy has entered into a recession, they definitely point out that the measures taken by the government have not improved matters in the last quarter. Hence, instead of being buoyed by GST collections for November, the government should speed up the sale of identified PSUs including Air India and bring about further structural reforms.