E-way bills signal rise in economic activity
NEW DELHI: Goods shipment within and across states picked up in the first half of December recovering from the slight dip in November after the peak festive season, showed official data on e-way bills.
Daily average generation of e-way bills needed for goods transportation stood at 2.2 million in the first 19 days of December, recovering from the 2 million seen in November after a robust 2.37 million e-way bills generated in October.
Indicators suggesting the robustness of the economic recovery would be significant input to policy makers who are currently drawing up the contours of the union budget for FY23 and the key fiscal numbers. Also, stable oil prices and absence of another wave of the pandemic would be crucial for the economy in the coming months. GST on transactions in December will be collected in January. After the initial impact of the second wave of the pandemic, both GST receipts of the central and state governments and the Centre’s direct tax collections have remained strong. GST collections had grown from ₹92,000 crore in June to ₹1.31 lakh crore in November, the second highest since GST roll out. Central government said last week its net direct tax collection so far this year touched ₹9.45 lakh crore, growing 60.8% from the year ago period. The indications are that the government may meet its ₹22 lakh crore gross tax collection target although the same cannot be said about meeting the ₹1.75 lakh crore disinvestment target.
Daily average generated e-way bills is understood as a yardstick to predict GST collections and, in turn, the economic activity, said Archit Gupta, founder and chief executive officer of Clear, an online tax service provider. “The holiday season has pushed sales across the country, which may have led to this uptick. These numbers are reflective of transport and economic activity. The volume of e-way bills generated in a month has had a direct impact on the monthly GST collections in the past and we can expect the same to continue in the future as well unless there is a major GST rate overhaul in the upcoming month,” said Gupta.
The easing of fiscal situation can potentially strengthen government’s effort on infrastructure spending which will have a multiplier effect on the overall GDP growth, D.K. Srivastava, chief policy advisor at EY India said in a review of the economy on Thursday. Government should also ensure that the adverse impact of Covid’s new strain, Omicron, is kept well under control so that any subsequent lockdowns can be avoided, said Srivastava. GST being a tax on consumption, analysts closely watch e-way bill data as a lead indicator of economic activity.