Robust GST Revenues, but Formal Reporting Discontinued
Goods and Services Tax (GST) collections have been on an upward trajectory, with the first month of the current fiscal year, April 2024, recording the highest-ever monthly collection at ₹2.10 lakh crore. This represents a significant 12.4% year-on-year growth, driven by strong increases in both domestic transactions (up 13.4%) and imports (up 8.3%).
The positive performance continued in May 2024, with GST revenues reaching ₹1.73 lakh crore, a 10% year-on-year increase. This upward trend underscores the growing strength of India's economy and the maturing of the GST system amid improving compliance.
Discontinuation of Monthly GST Data Release
However, a recent development has raised concerns about transparency in GST reporting. The Union Ministry of Finance has discontinued the formal monthly press release on GST collections, a practice that had been in place since the implementation of the GST in July 2017.
This means that the state-wise GST data breakup will now only be released if the states are willing to disclose it, reducing the overall transparency around GST revenues. The ministry has not provided any official reasons for this decision, which comes just weeks ahead of the first budget of Prime Minister Narendra Modi's third term.
Calls for Focusing on Net GST Revenues
Former Chief Economic Adviser Arvind Subramanian has previously raised concerns about the focus on headline GST collection figures, rather than the net revenues after accounting for refunds. This suggests that the discontinuation of the monthly press release may limit the public's ability to assess the true health of GST collections and their impact on government finances.
Balancing Growth and Transparency
As the government gears up for the Budget 2024, the principle of continuity and strategic realignment is likely to guide budgetary decisions, aiming to maintain economic stability and foster development. However, the discontinuation of the monthly GST data release raises questions about the government's commitment to transparency, which will be crucial in the new coalition government's first full budget.
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