India’s Goods and Services Tax (GST) collections in August are estimated to be over ₹1.42 lakh crore, 27% higher than in the same month of 2021, marking the sixth month in a row that the indirect tax has yielded over ₹1.4 lakh crore.
“The sustained growth in GST collections indicates that the growth momentum of the Indian economy has sustained even beyond Q1 of 2022-23,” the Finance Ministry said in a statement on the GDP estimates for the first quarter released by the National Statistical Office on Wednesday, that also included its growth outlook.
While the final GST revenue figures are scheduled to be released on Thursday, the ministry stressed that the growth in GST revenues was supported by a “robust growth in economic activity along with various measures undertaken to prevent anti-evasion activities and encourage better compliance”.
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E-way bills generated under the GST system also grew 15% to touch 7.56 crore in August, indicating robust domestic economic activity, the ministry said.
In July, GST revenues stood at ₹1,48,995 crore, the second-highest monthly collections since the launch of the tax regime in 2017 and the highest in three months. July’s GST kitty was 28% higher year-on-year and was boosted by a 48% surge in revenues from import of goods, while revenues from domestic transactions, including import of services, were 22% higher.
While India’s retail inflation had eased to a five-month low of 6.71% in July, the Finance Ministry highlighted several high-frequency indicators to emphasise that India’s growth-inflation matrix was on solid ground.
“With relatively high growth and low inflation, India, among the major peer economies has faced less of a [trade-off] between growth and inflation… Robust performance of high frequency indicators in July and August 2022 indicates sustained growth in Q2 of 2022-23,” it said.
“Domestic auto sales crossed pre-pandemic level in spite of the semi-conductor shortage, registering a YoY growth of 11.5% in July which is indicative of improvement in demand conditions in urban and rural areas,” the ministry noted.
Similarly, total bank credit and non-food credit continued to clock double-digit growth in July, as it had done in the April to June quarter, rising 13.4% and 13.9%, respectively. This is being driven by an uptick in credit flows to industry and services, the ministry reasoned.
Citing Purchasing Managers Indices (PMI) compiled by S&P Global, the ministry said manufacturing PMI was at an eight-month high in July, while Services activity remained ‘expansionary’ in the month.
“The government’s cumulative capex up to July has reached ₹2.1 lakh crore, with an increase of 62.5% over the cumulative capex in the corresponding period of last year. Fiscal deficit in the first four months of 2022-23 has narrowed to 20.5% of the budget estimates as compared to 21.3% in the corresponding period of the last year,” the statement noted.
