A large part of the year has been affected by Kovid-19, which has led to difficulties, especially for the middle and lower classes. But before Diwali, things seem to be improving. For example, sales of cars and two-wheelers have increased in the month of October. Market experts are saying that Dhanteras-Diwali in the markets may lead to higher sales than expected. The best news related to the country's economy in this period of great disaster is that after eight months, GST was recovered in October, more than one lakh crore rupees.
The GST recovery fell below the psychological level of Rs 1 lakh crore after the lockdown in the country, putting a lot of pressure on the sources of the Finance Ministry. The condition had deteriorated so much that the Center refused to share the states. But last month, this item came to Rs 1,05,155 crore, which is more than Rs 10,000 crore since September. Not only this, but it is also 10 percent higher than in the same month of last year. It is like drops of water in a hot desert.
This means that there has been a good increase in the buying and selling of goods, which is a symptom of the boom in the economy. This increased recovery has brought a smile to the withering face of the Finance Ministry. He sees clear signs of improvement in the economy and behind this, he believes that the GST recovery has progressively improved. If this pace continues in the coming months, it will be a matter of relief for the Finance Ministry, burdened by the economic crisis. It is currently believed that the increase in recovery is due to the festival and the receipt of outstanding input tax in September. A big reason is also that almost all kinds of ventures and businesses were given the green signal in September. Almost every sector of the economy is functioning again.
The economy will keep pace due to Diwali and other festivals in November. Frequent softening and changes in GST rules have also been effective in encouraging businessmen. In the initial stages, it faced many obstacles and also many practical difficulties, which reduced the recovery, but now it has started running at its own pace. The barrier to lockdown has also now been overcome, although the Kovid-19 pandemic is yet to be called off, the vaccine is expected to be developed by the first half of next year. After that, how will the speed of the economy be seen?
A detailed analysis of the GST recovery shows that the performance of the states has seen an improvement, while the Union Territory states have declined. Although five states have contributed 50 percent of the total revenue, two non-BJP ruled states Chhattisgarh and Andhra Pradesh have made good strides. The two states were surprised by a 26 percent higher recovery in the month of October, while the state-rich state of Gujarat grew by just 15 percent and the state of Mumbai, the country's financial capital, Maharashtra's performance was dismal (five percent). Chhattisgarh recovered Rs 404 crore more in October than in the same month last year. This is a major achievement for a tribal-dominated state.
The cash economy and other reforms in the farmers' account strengthened the rural economy, leading to increased consumption, leading to the GST recovery. The truth is that all states should strive to strengthen the rural economy so that total consumption in the country increases. To increase consumption, it is important that state governments also try and do not depend on the Center. At present, the situation of the states is such that they keep looking towards the center in terms of revenue and do not promote such steps, which do not accelerate the GST recovery.
Apart from this, there are many states which are indifferent to tax evasion. It is not that tax evasion is not happening in GST, it is happening in some states. Efforts should be made to stop this so that the revenue of the states increases. Apart from this, many states are excited and giving notice to businessmen, in which they are asking for such information, which is not needed. It is clear that the bureaucracy in those states does not want to lose its dominance. It is the duty of the states to allow the benefit of tax cuts to reach the customers. It is seen from the beginning that only businessmen and in many cases producers take advantage of tax cuts instead of giving them to customers. In such a situation, the state governments should intervene, but this is not happening as bureaucracy is not common with customers.
States like Maharashtra and Gujarat will have to increase their tax collections because the 'sin tax' that the central government was trying to earn extra does not seem to be fulfilling. The Centre's announcement to increase the guaranteed 14 percent compensation every year to states from the share of additional tax received from luxury goods, cigarettes, SUVs, etc. was defeated. Therefore, the states should try to increase tax collection on their own.
It has been three years since GST was implemented in the country and it is considered to be the biggest reform of this century. This has helped a lot in the timely delivery of manufactured goods to every corner of the country. Due to GST, long queues of trucks are no longer visible on the tax breaks, nor are the sales tax department heard of huge earnings.