Finally, after a Covid 19 induced slump, demand is picking up. Consumption is driving the revival of the Indian economy with states like Gujarat, Rajasthan, Tamil Nadu and West Bengal filling the 'shopping cart' at a fast clip, a review of GST data disaggregation by industry body Assocham said.
In all, 23 states and union territories, out of 35 have registered a positive (goods and services tax) GST revenue collection trend during February, reflecting an uptick in consumption.
The gross GST revenue collected in the month of February stood at Rs 1.13 lakh crore – an increase of 7 per cent over the same month last year.
The February GST collection data showed that Gujarat ranks among the largest consumption states with its revenue growing at an impressive pace of 14 per cent year-on-year — from Rs 7,215 crore to Rs 8,221 crore. Though Maharashtra is the largest consumption state, its annualised GST growth was on the lower side, partly because of a large base. Along with Karnataka, Maharashtra showed a modest annual expansion of two per cent for the month. However, credit also goes to these states for maintaining consumer confidence despite being amongst the largest consumption states, the study said.
As GST is mainly the consumption tax, it gives a better picture of consumer confidence than a combination of taxes which have since been merged into this uniform tax structure.
''The consumption story is catching up with the trend being led by manufacturing, FMCG, chemicals, fertiliser, real estate and construction with a major positive impact on industries such as steel and cement. Once the capacity utilisation reaches to the fullest, the investment wheel of the economy too would pick up momentum, giving further traction to the economy," Assocham Secretary General Deepak Sood said.
After two consecutive quarters of contraction, India is back on the growth track, registering 0.4 per cent expansion.
As per the revised growth numbers released, India’s economy contracted by 24.4 per cent in the first quarter owing to a stringent lockdown while in the second quarter it was a (-) 7.3 per cent.