Highs and lows: On GST metrics

That GST grossed ₹2.11 lakh crore in July , expanding by 15.4% year-on-year, the second best growth in FY27, could indicate that the Indian economy is resilient. But it conceals the uneven internal and external trajectories, and disparities within India. The 26.9% growth in import IGST vis-à-vis a 4.5% rise in domestic revenues ferrets out the criticality in the trade-led tax buoyancy. IGST’s faster pickup started during the post-pandemic recovery, reflective of global commodity inflation, higher imports of capital goods and the rupee’s depreciation. A 10%-12% depreciation of the Indian denomination over the past year had its reflection on the rupee cost of crude oil, electronics, machinery and chemicals — they collectively constitute as much as 50% of total imports — contributing to a higher import bill. Although gold imports added to higher IGST collections, supply fell to a six-year low, due to lower bullion imports, which fell 22%. High WPI inflation, notably at the manufacturing level, at 7.18% this June against 1.52% a year-ago period, explains the traction of domestic revenues in an ad valorem tax system amid five-year low manufacturing growth as seen from the HSBC Manufacturing PMI. The services witnessed slowest growth in 53 months with real estate and business services recording the strongest rise in charges, but the sector’s GST buoyancy is concentrated geographically.