What's New :
3rd January 2024 (10 Topics)

Increased GST revenues

Context:

Consistent surpassing of monthly GST revenue estimates.

GST Revenues in 2023

  • Revenue Surpassing Estimates: GST collections exceeded expectations, averaging ?1.66 lakh crore monthly, indicating a potential ?80,000 crore surplus.
  • Implications for Preelection Spending: May provide fiscal leeway for preelection government initiatives but could be moderated by an anticipated yearend slowdown.
  • RBI's Economic Projections: Predictions of a growth slowdown from 7.7% to 6% in the current quarter, indicating potential challenges despite increased GST revenue.

December's GST Figures

  • Decelerating Growth Rates: December showed the lowest growth (10.3%) in three months, a drop from November's 15.1%, hinting at a gradual slowdown.
  • Domestic Transaction Impact: Domestic transaction growth at 13% in December (down from 20% in November) implies a possible dampening of festive spending.
  • Economic Indicators: Despite resilient domestic consumption, declining eway bills and rural demand fragility pose concerns amid global headwinds.

Last Minute Data for Budget

  • Data for Interim Budget: Policymakers using this data for the Interim Budget must consider the slowing pace while factoring in the surplus inflow.
  • Fragile Rural Demand: Concerns over the fragile state of rural demand amid bleak farm prospects despite strong domestic consumption indicators.
  • Cautionary Notes for Projections: Last month's data should prompt caution in projecting fiscal measures due to anticipated economic deceleration.
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