In what must be seen as a positive sign to the Indian economy caught in a slump, GST revenue for the month of November rose again to a high of over Rs 1 trillion. This happens after its fall below the trillion mark in August, September and October. The positive turn might be due to the series of stimulus measures the Modi government has taken; it could also be a momentary spell. At the same time, the positives cannot be ignored in these otherwise difficult times.
The report comes close on the heels of release of government data which showed the Indian economy was currently expanding at its slowest pace vis-à-vis the growth in the past six years — the growth having come down to 4.5 per cent for the three months ending September this year. This fall was from the 5 per cent the previous quarter, and from 7 per cent a year ago; meaning the decelerating process is steady despite several governmental steps to boost growth. Six years ago, there was a similar scenario under the UPA government, when growth fell to 4.3 per cent in the quarter ending March 2013. A year later, the UPA exited from power and the NDA headed by PM Modi took charge. Curiously, the Opposition is now boasting only about the good times under the Manmohan Singh era and forgetting the scene they left behind in 2014.
PM Modi’s Demonetisation of 2016 November had serious adverse effects on the national economy. This controversial step and the GST rollout that followed together hit the economy badly for a start. The positive side of these are often lost sight of. Both steps were direct attempts to control the sway of black money. The steps helped to an extent. Cash transactions via the informal means have become difficult due to new regulations. The unification of the markets and taxation system seriously hurt the informal economy which ruled the roost in the past. On the positive side, some order has come about in trading deals. Also, tax evasion has reduced and more money started rolling into the government coffers.
The jump in GST collections bodes well for the nation and the economy and hope is that this scenario will be sustained. As a result, the government will have more money to splurge on infra projects, which will help in larger circulation of money in markets and through people’s hands, and also speed up defence purchases to tackle external threats.