Consumption driving India’s economic revival: ASSOCHAM – Times of India



    MANGALURU: Consumption is certainly 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 ASSOCHAM has noted.
    In all, 23 states and UTs registered a positive GST revenue collection trend during February, reflecting an uptick in consumption.
    Breaking down the February 2021 GST collection showed that Gujarat has achieved the enviable position of being amongst the largest consumption states and has grown its revenue at an impressive pace of 14 per cent year-on-year in February (from Rs 7215 crore to Rs 8221 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.
    As the Goods and Services Tax (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 GST. Being the largest consumption state, Maharashtra raked in GST revenue (Centre-State combined) of Rs 16,103 crore in February 2021, showing an increase of two per cent over the corresponding month of last year. A similar 2 per cent rise was seen in Karnataka, with GST revenue increasing to Rs 7581 crore for the month under review.
    ”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. He said the chamber’s assessment about the V-shaped recovery in the FY’22 is being reflected in the high-frequency data, including the key figures of the GST collections.
    The gross GST revenue collected February 2021 Rs 1.13 lakh crore, showing an increase of seven per cent over the same month last year.
    The other states pointing towards speedy revival in consumption include Tamil Nadu, Himachal Pradesh, Punjab, Haryana, Sikkim, Arunachal Pradesh, Odisha, Jharkhand, Madhya Pradesh, Chhattisgarh and Jammu and Kashmir.
    However, states like Goa which depend significantly on services like tourism, have shown a drop. With the vaccination drive picking up pace, the services sector too should return to growth in the next few quarters, the ASSOCHAM review noted.


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