Growth in Q2 could be higher as GST revenues still pouring in

Growth in Q2 could be higher as GST revenues still pouring in

Chief statistician TCA Anant on Thursday said India’s economic growth in the July-September quarter could be higher than 6.3% as indirect taxes are still being collected on account of the goods and services tax GST) which was rolled out on July 1.

“It is likely that when revised estimates are prepared, indirect tax collections for this period may actually be higher than what we have reported,” Anant said at a press conference while admitting that the GST introduced a “certain level of statistical challenge” in compiling the growth numbers.

India’s growth as measured by the gross domestic product (GDP) was 6.3% in the second quarter, up from 5.7% in the previous quarter which according to Anant “shows a significant trend reversal in growth rates, indicating it is returning to more normal levels”.

He said manufacturing has shown a revival and capital goods production has picked up but construction continues to be slow but is expected to increase. Agriculture sector performance, he said, was held up because of the non-crop segment. Manufacturing grew 7% while agriculture growth was 1.7%, down from 2.3% in the trailing quarter.

GST has consolidated central and local taxes including value added tax, excise and service tax into a single levy. According to Anant, GDP could also be an underestimation on account of sales tax collection as many proxies were used to calculate it but the higher mop up could reflect in the revised growth data.

INVENTORY PILE UP

Anant said though there was no impact of inventory pile up on the gross value addition (GVA) account of GST rollout in the second quarter, the ripples can be felt in the third quarter. “It’s possible that anticipating the need for the festive season, most of the production went into the sale and inventory restocking may happen later…inventory accumulation effect may persist in the third quarter as well,” he explained.

DEMONETISATION

Commenting on the demonetisation drive last year and its impact on India’s growth, Anant said the move will be very hard to read from GDP numbers. He explained that normal trading practices and a lot of trade in India, particularly in the informal sector, is based on relationship-based trading due to which cash transactions can also be substituted with informal cred.“My suspicion is that a lot of the claims of the impact of demonetisation in agriculture simply does not account for the presence of such relationships in the sector,” he said.

The Economic Times, New Delhi, 1st November 2017

Data storage norm splits digital payments industry

Data storage norm splits digital payments industry India’s nascent digital payment industry could be thrown into disarray due to the demand by the Reserve Bank of India (RBI) that all user data be stored within the country, fears an industry grouping, which has termed the decision as “heavy-handed”, even as others, including the country’s largest digital payment provider Paytm, have hailed the move. In a bid to narrow the growing schism, the industry is planning to send a formal representation to the regulator highlighting its concerns, a top official told ET. “We are trying to build a consensus on the issue," said the person adding that the representation to the central bank will be ready this week. RBI on April 6, mandated all payment companies—global and local—to set up data storage facilities within India by October. The stringent six-month deadline has attracted the ire of several sections of the industry that fear it will lead to a disruption of wel...

Offer’s for all of you

Great Bumper Dhamaka Offer’s for all of you... It's Time to see your Business Online, WebeCreator Offer Website Designing with domain & Email @ nominal charges. For a year For More information visit us http://goo.gl/KlpppF call on 9890151261/9773197533 drop a mail to sales@webecreator.com

Sebi to finalise options in commodities today

The Commodity Derivatives Advisory Committee of the Securities and Exchange Board of India ( Sebi) will meet on Friday with senior officials of the latter, to give a final shape to the rules on options trading in commodity futures, beside revising the warehousing norms to ensure good delivery on settlement. The decision taken, after discussing with the advisory committee, will be placed before the regulator’s board, to finalise the regulations. According to knowledgeable sources, three commodities in each segment, agricultural and non- agricultural, have been proposed for introducing options. It appears commodities from the soya and guar segments are preferred in the former. From the non- agri segment, it is likely that gold, silver and crude oil will be finalised. All these These have better liquidity and both the National Commodity and Derivatives Exchange and the Multi Commodity Exchange, respectively, will be able to introduce the options. In the equity segments, options ar...

CA Online

Search This Blog