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GST and Manufacturing Continue March in August

India’s goods and services tax (GST) collections remained robust in August while manufacturing stayed firm at a near eight-month high, indicating strength in the economy as interest rates inched up and inflation remained elevated. Other high frequency indicators such as fuel demand and car sales also stayed firm in the month while demand for work under the rural employment scheme dropped, suggesting improved employment opportunities.

These indicators suggest a strong July-September quarter for the economy. Data released on Wednesday showed India’s economy grew by lower-than expected 13.5% in the June quarter, riding a recovery in the contract-intensive services sector. “While the absolute GST collections displayed a mild sequential dip in August 2022, the YoY growth rate remained at an impressive 28%, reflecting the revival in consumption, improved compliance as well as elevated inflation,” said AditiNayar, chief economist, ICRA.

GST collections rose 28% in August from a year ago to ₹1.49 lakh crore in July. “Better reporting coupled with economic recovery has been having a positive impact on the GST revenues on a consistent basis,” the finance ministry said, releasing the numbers for the month on Thursday.  S-ET

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