GST, PMI numbers bolster India's economic growth credentials

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₹1.68 trillion in goods and services tax (GST) revenue in February, 12.5% more than the revenue collected February 2023, amid strong manufacturing activity and economic growth momentum. However, the number was a tad lower than January’s figure of ₹1.72 trillion.

The finance ministry said that monthly average GST revenue collection this fiscal has gone up to ₹1.67 trillion, from ₹1.5 trillion last fiscal as “GST revenue figures demonstrate continued growth momentum and positive performance". So far this financial year, gross GST revenue collection stands at ₹18.4 trillion, showing an annual growth of 11.7%, the ministry said.

Manish Mishra, partner and head of indirect tax practice at JSA Advocates and Solicitors, said that increased revenue collection efforts on the part of the authorities coupled with continued issuance and adjudication of notices have been significant contributors to revenue growth. “Buoyancy in tax collections is expected to continue in March, being the last month of the financial year, due to increased recovery efforts by the authorities," he said.

Another high frequency indicator showed on Friday that manufacturing activity was going strong. S&P Global’s survey of around 400 manufacturing purchase managers showed that production rose at its fastest pace in five months in February, fuelled by the quickest increase in sales since last September and the strongest expansion in new export orders for 21 months.

The seasonally adjusted HSBC India manufacturing purchasing managers’ index (PMI) recovered further from December’s 18-month low of 54.9, rising to 56.5 in January and then to 56.9 in February. The latest reading pointed to the strongest improvement in the health of the sector since September 2023,