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

News Snippets

  • Supreme Court sentences Congress leader Navjot Singh Sidhu to one year rigorous imprisonment in the 1988 road rage case
  • Home Minister Amit Shah says rights should not be demanded before fulfilling responsibilities and that universities are no place to wage ideological battles
  • NIA court convicts JKLF chief Yasin Malik in terror funding case after he pleads guilty of all charges
  • A study backed by PM-EAC has recommended universal basic income and urban job guarantee and greater spend on social sector schemes
  • Supreme Court rules that the decisions of the GST Council are not binding on the Centre and the states, leaving the door open for states to levy further taxes
  • After sustained campaign by BJP MP Arjun Singh, the Centre today withdrew the jute price cap order, industry welcomes move
  • Akasa Air might postpone its July launch due to late arrival of aircrafts
  • Metro Cash & Carry decides to sell Indian operations. All major players, including Reliance retail and Amazon, are likely to bid
  • Local and global cues spook the markets on Friday - Sensex crashes 1416 points to 52792 and Nifty by 430 points to 15809
  • IPL: RCB crushes GT by 8 wickets as Virat Kohli returns to form with a well-made half century
  • Nikhat Zareen is world champion in flyweight category. Wins gold at Women's World Championships at Instanbul
  • Supreme Court uses its special powers under Article 124 to release A G Perarivalan, a Rajiv Gandhi assassination convict
  • Indrani Mukherjea, prime accused in the Sheena Bora murder case, gets bail from Supreme Court after 6.5 years in jail
  • Hardik Patel quits Congress, says top leaders distracted by mobile phones and state leadership busy arranging 'chicken sandwiches' for them
  • Anil Baijal resigns as Lieutenant Governor of Delhi citing "personal reasons"
Nikhat Zareen is crowned world champion in the flyweight (52Kg) category at the Women's World Championships in Istanbul /////// Supreme Court sentences Navjot Singh Sidhu to rigorous imprisonment of one year in the road rage case /////// Sunil Jakhar, who quit the Congress a few days ago, joins the BJP
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.