GST revenue trends indicate the recovery is neither smooth nor fast
But it is unclear if the economy is recovering ‘fast’ in tandem with the easing out of COVID-related restrictions. The GST collected in August pertains largely to economic activity in July and the mobility restrictions in most States had been eased further that month compared to June, including in the southern States. GST e-way bills generated in July surged to an average of 2.1 million from 1.8 million in June. Yet, on a sequential basis, GST revenues in August are almost 4% lower than the ₹1.16-lakh crore collected in July. This recovery appears choppy rather than ‘fast’. Similarly, the Government’s claims of higher compliance levels reiterated over the past several months need to be matched with accompanying numbers. At the start of the GST regime four years ago, it had 6.6 million taxpayers. On GST Day this July, the Finance Minister said this had risen to 12.8 million. But how many of them are filing returns each month is no longer known since the Government stopped disclosing that number from February 2021. This makes it virtually impossible to distil the effects of compliance and growth on GST revenues. Deviating from standard data points spikes suspicions about what they strive to hide. The Government would do well to restore and enhance its quality of data disclosures — even State-wise revenues have been selectively shared recently. As the Reserve Bank of India Governor has highlighted, the economy is still delicately poised — manufacturing recovery has stumbled in August, services remain stressed, exports stay strong but have slipped on a month-on-month basis just like GST collections. There is surely a need to talk things up when the chips are down, but ultimately only facts and figures can invest words with meaning.
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