February 2, 2023 1:32 am

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Second-highest Monthly GST Collection Signals, Economy on the Right Track

This was the 8th consecutive month that recorded monthly GST revenue worth more than 1.4 lakh crore rupees.

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The Ministry of Finance has released its monthly GST collection data for the month of October ’22 on November 1, 2022. The data revealed that the gross GST revenue collection for the month of October was ₹1,51,718 Crore, the second-highest collection ever recorded after April 2022, which stood at ₹1,67,540 crore.

This was the 8th consecutive month that recorded monthly GST revenue worth more than Rs ₹1.4 lakh crore rupees. 

The Ministry also released a chart showing trends in monthly gross GST revenues during the current year. The table attached below shows the state-wise figures of GST collected in each State during the month of October 2022 as compared to October 2021.

Source: Ministry of Finance

Further, a list showing state-wise growth of GST revenues during October 2022 is also released.

Source: Ministry of Finance

It is the second time that the ₹1.5 lakh Crore rupees figure has been crossed since the inception of GST. E-way bills have also seen significant growth. A total of 8.3 crore E-way bills were generated in September 2022 compared to 7.7 crore E-way bills generated in August 2022. Out of ₹1,51,718 Crore rupees GST collected, ₹26,039 crore is CGST, ₹33,396 Crore is SGST, ₹81,778 crore is IGST, and Cess is ₹10,505 Crore Rupees.

The data shows that there were 8 states which showed a decline in GST, and the rest saw positive growth. 

GST data is not the only one to indicate the Economy is in a strong revival mode. Various other economic indicators show that the Indian Economy is not only recovering well but is on the right path.

1. CREDIT OFFTAKE

Despite high inflation, credit growth continues to make new highs. The RBI released data on Monday, October 31, 2022, showing data on sector-wise bank credit growth, which shows that credit offtake continued to remain sturdy across all the sectors, which include farming, industry, service, and retail. According to the RBI reports, In Sept 2022, the total bank credit grew by 16.4% on a YoY basis as compared to the pre-pandemic time when the bank credit was 8.2%.

However, the non-food bank credit growth of 16.9% was in Sept 2022 as compared to the growth in 2021 was 6.8%. The credit to services sector moved to 20% from 1.2% in September 2021. The personal loans segment grew by 19.6% as compared to last year, which was 13.2%. In absolute terms, credit outstanding stood at Rs 128.6 lakh crore as on October 7, rising by Rs 19.56 lakh crore over the last 12 months.

2. PMI 

Even though the world economy has been in a mess since Covid19 pandemic, India has sustained growth and has set an example for its economic growth. After the inflationary pressure, the PMI rose to 55.3 from 55.1 in October 2022. According to the S&P Global’s Purchasing Managers’ Index. Whereas on the other hand, countries like Malaysia, South Korea, Taiwan, and China faced a downfall because of the slow demand for Chinese goods.

“The Indian manufacturing industries recovered in October, with factory orders and production rising strongly despite losing growth momentum”, said Pollyanna De Lima, the economics associate director at S&P Global Market Intelligence. The rise in the headline PMI number largely reflected stronger increases in employment and stocks of purchases, S&P said.

3. GDP Growth

The Reserve Bank of India has slashed its fiscal year 2022-23 GDP growth forecast to 7% from 7.2% and is holding an out-of-turn meeting on November 3 to deliberate on a report it needs to send to the government on its failure to meet its inflation mandate. In August 2022, a provisional estimation was released by the National Statistical Office. Union Minister Pankaj Chaudhary stated that the Indian Economy has fully recovered its GDP level of 2019-20.

The real GDP growth in 2021-22 stands at 8.7%, which is 1.5% higher than the GDP of 2019-20. Most of the countries, including India, experienced a downward growth due to the Covid crisis, but the revised growth for India is still higher than that of major advanced and emerging market economies, the Minister stated.

4. CPI Inflation

The Labour Bureau, an attached office of the Ministry of Labour & Employment, has been compiling the Consumer Price Index for Industrial Workers every month on the basis of retail prices collected from 317 markets spread over 88 industrially important centres in the country. The index is compiled for 88 centres and All-India and is released on the last working day of the succeeding month.

The all-India CPI-IW for September 2022 increased by 1.1 points. Within one month, the percentage changed, it increased by 0.84% with respect to the previous month compared to an increase of 0.24% recorded between corresponding months a year ago.

5. Consumer Confidence Index 

The CCS( Consumer confidence survey), which was released by the RBI, obtains current perceptions of a year ago and one year ahead expectations on the general economic situation, employment scenario, overall price situation, and own income and spending across 19 major cities. 

Consumer confidence has been on a path of recovery since July 2021 after the impact of the COVID-19 pandemic, though the current situation index (CSI) remained in negative terrain, it improved in the latest survey round on the back of better sentiments on the general economic situation and spending.

Even though the current CSI stands negative, it has improved since the last round of surveys in July 2022. The CSI rose by 3.3 points from 77.3 in July to 80.6 in September. Meanwhile, FEI ( the future expectations index) (blue) remained steady at 113.

“Most households reported higher current spending, which was mainly driven by essential spending; nearly three-fourths of the respondents expect a further rise in overall spending over the next year, and another 20% expect it to remain around the prevailing levels,” according to Consumer Confidence Survey (CCS).

According to the IPSOS’ Consumer Confidence index, the global country average is 45.7 (expecting a lack of confidence) and China is leading the charge with Saudi Arabia and India, which is a good sign for the Indian Economy.

During August, If we check the CCI of other countries, then Germany’s Consumer Confidence Index is well below covid low.

China, US & Europe is seeing the worst drought in recent decades. India is looking stable. Energy imports are arriving at discounts from Russia. Chemical companies will also be benefited as China shuts down industries.

 6. Industrial Production

The index of Industrial Production (IIP) is an index that details the growth of various sectors in the Economy. The Eight Core Industries comprise more than 40% of the weight of items included in IIP. These include Electricity, steel, refinery products, crude oil, coal, cement, natural gas, and fertilisers.

The IIP, which witnessed a contraction of -0.8% in August, shows two separate data released by the Ministry of Statistics & Program Implementation (MoSPI).

The August Index of Industrial Production (IIP) numbers were at an 18-month low. As per data, the previous low in IIP growth was a contraction of 3.2% registered in February 2021. However, The combined Index of Eight Core Industries increased by 7.9% (provisional) in September 2022 as compared to the Index of September 2021. The production of Cement, Coal, Fertilizers, Electricity, Steel and Refinery Products industries increased in September 2022 over the corresponding month of last year.

7. Expenditure on infrastructure 

Construction of infrastructure, especially highways, has been the Central government’s most important economic agenda to lift GDP growth. The massive capital spending has resulted in a sharp improvement in the profitability of infrastructure development firms.

8. Rise in exports 

According to the PIB, India achieved a monthly value of merchandise export in September 2022 amounting to ₹2,676.47 billion and decreased by 3.52% over ₹2,796.80 billion in September 2021. India’s merchandise export in April -September 2022-23 was ₹18,952.17 billion, with an increase of 15.54% over 16,403.70 billion in April -September 2021-22.

India’s merchandise import in September 2022 was ₹4,911.01 billion, an increase of 5.44% over ₹4,657.80 billion in September 2021. 

India’s merchandise imports in April -September 2022-23 was ₹31,322.05 billion, with an increase of 37.89% over ₹22,713.93 billion in April -September 2021-22.

9. Not much rise in energy prices and natural resources  

Ever since the Russia-Ukraine crisis, energy prices in major economies have increased manifold, resulting in higher inflationary pressure on these economies.

However, India and a couple of other economies have not only found better deals to contain energy prices. This has resulted in a contained inflationary pressure which is likely to ease down in coming quarters. 

The RBI governor, Sri Shaktikanta Das, addressed the annual FIBAC 2022 conference and spoke on the challenges and progress of the Indian Economy. 

He said, “the banks and businesses should continuously assess the risk buildup, if any, sharpen governance and strive to maintain healthy levels of capital and other buffers. So far as the RBI is concerned, we remain committed to supporting and preserving macroeconomic and financial stability. Once again, it is a moment of ‘whatever it takes”.

Ritika Chandola
Ritika Chandola

"The wings I have, I write with them"
A media practitioner, a seeker, listener, learner, researcher, and a writer.

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