At last, a good news
For Printing Download Epaper from files section from bottom of this page
Good news and that too on economic front are rarest of the rare species for Indians in general and Indian economy in particular. We have become habitual of reading news concerning rising inflation, rising rates of petrol and diesel along with LPG, scarcity of coal and consequent power shortage in the country etc. The list is endless. An atmosphere of disappointment, lack of enthusiasm is there in the country. But there has been a good news at last come from economic front. The all-time high monthly Goods and Services Tax (GST) collection of Rs one point sixty eight lakh crore in April, an increase of twenty per cent from April last year, is an encouraging statistic, notwithstanding the subdued sentiment because of the rising inflation levels. Last month’s mop-up is Rs twenty five thousand crore higher than the previous record set in March. Attributed to improvement in compliance behaviour and stricter enforcement action against tax evaders, the highest collection since GST’s rollout in 2017 sends out largely positive signals, though concerns remain. While it reflects a pick-up in economic activity despite the escalating geopolitical conflict, and the effect of tighter input credit norms, also noteworthy is the huge price rise in input costs, visible in the surge in retail rates. This is indicator of another positive sign and that is the effect of Corona pandemic has been totally faded out now. The economic activity is in full swing equal to pre Covid levels and the bad effects of Corona have been vanished into the oblivion. The overall figures remain enthusing: GST compensation cess collections, which are used to recompense states, grew thirteen point zero eight per cent over March. In April, eighty four point seven per cent of registered businesses paid taxes, compared to seventy eight point three per cent in the year-ago period. During the month, the revenues from import of goods were thirty per cent higher and those from domestic transactions, including import of services, seventeen per cent greater than the year-ago figure. Twenty states and UTs registered over fourteen per cent growth in GST collections in April. Most could be in a position to achieve a revenue growth of fourteen per cent, the guaranteed level under the compensation mechanism that ends on June thirty. The worrying part is the divergence among states. If Manipur saw a contraction of thirty three per cent, there was a growth of thirty three per cent in Uttarakhand. This shows our economic activity has caught great momentum with running of factories and service sector is also growing with usual enthusiasm. Indirect taxes like GST do not distinguish between the rich and poor as everyone pays the same rates, while direct tax is on the income levels and profits. Collections from personal income tax are growing faster than from corporate tax, and that shifts the tax burden to those with a lesser capacity to pay. The apparently uneven nature of the tax collection system is an unresolved issue and calls for a rationalization of GST rates, where the higher slabs are confined to high-end consumption items. GST collection increased means central government has huge resources for development works it has promised to the nation. The development works come into reality with government exchequer is flourishing with notes. This is the positive signal which is very crucial for economy and it has come at the crucial time. Only the unsolved problems is divergence among states about GST collection and returns they are getting. Mumbai and Maharashtra providing maximum GST collection followed by Tamil Nadu and these two states are not getting enough returns. This question is not new and it has been coming since the days of general taxes.