Economic recovery shows green signals with rise in GST collection, manufacturing
In a much-needed relief for the Union Government, economic activities in the country are picking up pace in the post-pandemic recovery process. Key economic indicators such as GST collections, manufacturing activity and auto sales have shown signs of mild recovery in the month of September.
In a major development, Goods & Service Tax (GST) collected for September 2020 increased by 4% (total Rs 95,480 crore) after six months of unprecedented contraction. It is a crucial indicator of the return of the economic activities in the country after months of slowdown induced by the pandemic lockdown.
Manufacturing activity is also progressed at its fastest pace in almost 8 years as per reports. In September, the IHS Markit India Manufacturing PMI (purchasing managers’ index) rose to 56.8 from 52 in August as a result of the resumption of the production process. This consistent improvement signals hope for speedy economic revival among the stakeholders of the manufacturing sector.
In addition, automakers delivered 13 percent more vehicles to dealerships ahead of this year’s festive season as compared to the same time previous year. This development points towards a hopeful recovery of the sector in the coming months. Sales of tractors, which are crucial to rural development, also improved in September after Mahindra & Mahindra reported an 18% jump in the sale of farm equipment.
Indian Railways has come back on track after earning higher revenue in September 2020 as compared to the same time last year. A 13.54% increase in freight revenue was witnessed by the railways after it earned a total of Rs. 9,896.86 crores from freight loading. It is approximately Rs 1,180.57 crores higher than last year’s revenue (Rs 8716.29 crores) from freight loading during the same period.
Unified Payment Interface (UPI), National Payments Corporation of India (NPCI)’s flagship payments platform, also observed record-high sales last month. Finance Secretary AB Pandey reportedly stated that more than 5.74 crore e-way bills have been generated so far, with almost 26.2 lakh e-bills being generated on September 30 alone – the highest in a single day.
However, amid these developments, the value of new projects continued to decline in the September quarter. According to Comptroller and Auditor General (CAG) of India officials, the pace of the country’s economic recovery will largely depend on the implementation of steps initiated by the government to ensure the resumption of various business activities. Even though Coronavirus-related challenges continue to loom upon the country, economic activities are resuming as per the guidelines issued by the government. Earlier, the Centre announced the reopening Cinema halls and multiplexes from October 15 under its Unlock 5.0 process.