Virendra Pandit
New Delhi: The Covid-19 battered Indian economy may well be on way to recovery faster than the doomsayers predicted, as, despite ongoing restrictions, the country is regaining economic strength, sooner than many thought.
The latest heartening numbers came from the Goods and Service Tax (GST) collections which crossed the Rs. One lakh crore (one trillion) mark for the second straight month in November, thanks to the festival season.
The GST collection was Rs.1.049 trillion in November 2020, compared to Rs. 1.049 trillion in October, the report said on Tuesday.
This is the straight third month when the collections rose year-on-year. November collections were 1.42 per cent higher than the same month of the previous year. So, the yearly growth came down from 10.25 percent in October and 3.87 percent in September.
These collections were mostly for transactions done in October, representing the impact of the festival season, the reports said.
According to the data available, Central GST was slightly less at Rs 19,189 crore in November compared to Rs 19,193 crore in October, while state GST was more at Rs 25,540 crore and Rs 25,411 crore, respectively.
“The second straight month of Rs one trillion-plus collection of GST is certainly indicative of continued economic recovery and the collections being slightly more than the same month last year is quite encouraging,” according to Abhishek Jain, Partner, Ernst & Young.
This should also help in containing the overall shortfall of GST collection in 2020-21 caused by the pandemic. India was the worst major economy affected by Covid-19. In the first quarter of FY21 (April-June), it’s Gross Domestic Product (GDP) contracted by a staggering 23.9 percent, the worst-ever in Indian history.
It, however, was less severe at minus-9.3 percent in the second quarter (July-September), indicating the emergence of some green shoots.
The International Monetary Fund (IMF), which estimated an 11 percent fall in per capita predictions in 2020, had earlier stated that it could take at least three years for the Indian economy to recover before it’s per capita GDP could be back at pre-pandemic levels.
Some economists are, however, pessimistic.
For example, Sabyasachi Kar, RBI Chair at the National Institute of Public Finance and Policy, said that, in the best-case scenario, the Indian economy would be back on rails to pre-pandemic levels only by the year 2033, assuming that the recovery is significant and its GDP grows at 7 percent for the next 13 years.
(VP)
