GST receipts decline to three-month low but hold on to Rs 1.65 trn in Dec

Goods and services tax (GST) collection in December declined to a three-month low due to economic activities winding down after Diwali but remained elevated at Rs 1.65 trillion. The growth rate year-on-year fell to a three-month low of 10.3 per cent over Rs 1.49 trillion in December 2022-23. GST collection in a particular month is on account of production, sales, and purchases in the previous month.Thus, collection in December pertained to transactions in November, which was marked by holidays after Diwali, slowing receipts. The same trend was visible in other data points such as the core sector, which witnessed a six-month low growth rate of 7.8 per cent in November. GST collection has been Rs 1.65 trillion and above for six months of the nine this financial year. It did not fall below Rs 1.57 trillion in any month.Average monthly gross GST collection -- Rs 1.66 trillion in the first nine months -- represents a 12 per cent rise over the Rs 1.49 trillion recorded in the corresponding period of FY23. “While GST collection is slightly lower than what was seen last month, the consistent mark above Rs 1.6 trillion provides large fiscal confidence,” said Abhishek Jain, partner and national head (indirect tax), KPMG. Central GST (CGST) after the integrated GST settlement stood at Rs 70,501 crore in December, the third highest in the nine months, after April and October. With this, CGST yielded Rs 6.26 trillion during April-December -- 77 per cent of the Rs 8.12 trillion estimated in the Budget Estimates (BE) for 2023-24.

With three more months remaining this financial year, CGST collection is likely to exceed the Budget Estimate. After 42 per cent devolution to the states, CGST receipts, together with robust direct tax collection, would provide enough tax revenues to the government to bring its fiscal deficit to the budgeted 5.9 per cent of gross domestic product. This is likely to happen despite dwindling disinvestment receipts and expected higher revenue expenditure due to various subsidies. The earlier data showed direct tax collection after refunds grew 20.66 per cent to Rs 13.7 trillion till December 17 this financial year, accounting for a bit over three-fourths of the BE at Rs 18.23 trillion for 2023-24. In December, revenues from domestic transactions (including imports of services) were 13 per cent higher than those from these sources during the same month last year. This means GST on import of goods (integrated GST and cess) slowed collection. GST on import of goods rose just 3.65 per cent at Rs 42,613 crore in December year-on-year. Barring Sikkim and Meghalaya, every state saw growth in GST collection in December. Meghalaya saw flat GST receipts at Rs 171 crore. States and Union Territories such as Ladakh, Arunachal Pradesh, Andaman and Nicobar, and Lakshadweep saw growth in the range 35-310 per cent. Saurabh Agarwal, tax partner at EY, attributed this to increased economic activities in these areas. However, Rajasthan and Chhattisgarh each recorded a mere 1 per cent growth rate in December, while Jharkhand saw a 4 per cent rise. “While major states have continued their growth, deeper analysis is required for its lack in Rajasthan, Chhattisgarh, and Jharkhand,” said M S Mani, partner, Deloitte India.

- Business Standard 2th January, 2024

RBI deputy governor cautions fintech platform lenders on privacy concerns during loan recovery

India's digital lending infrastructure has made the loan sanctioning system online. Yet, loan recovery still needs a “feet on the street” approach, Swaminathan J, deputy governor of the Reserve Bank of India, said at a media event on Tuesday, September 2, according to news agency ANI.According to the ANI report, the deputy governor flagged that fintech operators in the digital lending segment are giving out loans to customers with poor credit profiles and later using aggressive recovery tactics.“While loan sanctioning and disbursement have become increasingly digital, effective collection and recovery still require a 'feet on the street' and empathetic approach. Many fintech platforms operate on a business model that involves extending small-value loans to customers often with poor credit profiles,” Swaminathan J said. Fintech platforms' business models The central bank deputy governor highlighted that many fintech platforms' business models involve providing sm

Credit card spending growth declines on RBI gaze, stress build-up

Credit card spends have further slowed down to 16.6 per cent in the current financial year (FY25), following the Reserve Bank of India’s tightening of unsecured lending norms and rising delinquencies, and increased stress in the portfolio.Typically, during the festival season (September–December), credit card spends peak as several credit card-issuing banks offer discounts and cashbacks on e-commerce and other platforms. This is a reversal of trend in the past three financial years stretching to FY21 due to RBI’s restrictions.In the previous financial year (FY24), credit card spends rose by 27.8 per cent, but were low compared to FY23 which surged by 47.5 per cent. In FY22, the spending increased 54.1 per cent, according to data compiled by Macquarie Research.ICICI Bank recorded 4.4 per cent gross credit losses in its FY24 credit card portfolio as against 3.2 per cent year-on-year. SBI Cards’ credit losses in the segment stood at 7.4 per cent in FY24 and 6.2 per cent in FY23, the rep

India can't rely on wealthy to drive growth: Ex-RBI Dy Guv Viral Acharya

India can’t rely on wealthy individuals to drive growth and expect the overall economy to improve, Viral Acharya, former deputy governor of the Reserve Bank of India (RBI) said on Monday.Acharya, who is the C V Starr Professor of Economics in the Department of Finance at New York University’s Stern School of Business (NYU-Stern), said after the Covid-19 pandemic, rural consumption and investments have weakened.We can’t be pumping our growth through the rich and expect that the economy as a whole will do better,” he said while speaking at an event organised by Elara Capital here.f there has to be a trickle-down, it should have actually happened by now,” Acharya said, adding that when the rich keep getting wealthier and wealthier, they have a savings problem. “The bank account keeps getting bigger, hence they look for financial assets to invest in. India is closed, so our money can't go outside India that easily. So, it has to chase the limited financial assets in the country and

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