Winning Bizness Economic Desk

The country’s Goods and Services Tax (GST) revenue collection in April of this year has clocked a record Rs 2.10-trillion.

This is the first time that the GST collection has breached the Rs 2-trillion mark since the launch of the tax regime in 2017. This high collection also reflects a very healthy economic growth in the country.

“This represents a significant 12.4 per cent Year-on-Year (YoY) growth, driven by a strong increase in domestic transactions, up 13.4 per cent, and imports, up 8.3 per cent, the Union Finance Ministry said.

After accounting for refunds, the net GST revenue for April stood at Rs 1.92-trillion, a 15.5 per cent jump from the same period last year.

Here, it must be pointed out that the second-highest monthly collection of Rs 1.78-trillion was clocked in March of this year. The collections are as clear an indication as any that the country’s economy is moving forward rapidly. It also shows that the government’s initiatives to up compliance and tighten measures against tax evasion are paying dividends.

The Central Goods and Services Tax (CGST) collection stood at Rs 43,846-crore in April while State Goods and Services Tax (SGST) stood at Rs 53,538-crore.

Integrated Goods and Services Tax (IGST) was Rs 99,623-crore, including Rs 37,826-crore collected on imported goods.

Here, it is important to highlight the robust efforts taken by GST officials to boost GST collections. Zero tolerance towards non-filers coupled with rigorous measures to combat fake invoicing and registration have all combined to significantly increase collections.

Gems, Jewellery Exports Slide To A 3-Year Low

India’s gems and jewellery exports, one of the largest categories in the country’s export basket, witnessed a steep southward movement, sinking to its lowest levels in three-years due to lower global demand.

During the last fiscal (FY 24), the country’s gems and jewellery exports stood at USD 32.71-billion. In the two previous years of FY 23 and FY 22, the exports stood at USD 37.96-billion and USD 38.94-billion.

The point to note here is that during the Covid-19 pandemic, exports of gems and jewellery were adversely affected along with other commodities as most economies resorted to stringent lockdowns to prevent the spread of the Corona virus.

It must also be pointed out that gems and jewellery exports slid sharply to USD 3.86-billion in FY 19 and USD 4.32-billion in FY 20, before climbing up to USD 26.02-billion in the next fiscal (FY 21).

The Gems and Jewellery Export Promotion Council (GJEPC) had set a target of USD 40-billion in FY 24 for exports on the back of higher sales to the United Arab Emirates (UAE).

India imports rough diamonds since it doesn’t produce these commodities in any significant quantity and exports gems and jewellery after making value-additions in the process.

Exports to the north American region stood at USD 10-billion in FY 24 while exports to north-east Asia including China stood at USD 7-billion, down from USD 13-billion and USD 9-billion in FY 23.

Gems and jewellery exports to West Asia and north Africa, which includes the UAE, a major market for India’s exports increased to USD 9-billion last fiscal, up from USD 7-billion in the previous year.

Garment Exports From Tiruppur Reviving

Garment exports from Tiruppur, a major textiles hub in Tamil Nadu, exhibited signs of revival in both February and March of this year after a slide in demand for more than a year.

As per data with the Tiruppur Exporters’ Association (TEA), knitwear exports from Tiruppur have increased 6.4 per cent in February and 5.6 per cent in March of this year in dollar terms when compared with the year-ago period.

Total garment exports from the country registered an increase of 4.8 per cent in February and 1.7 per cent in March as compared with the year-earlier period.

The president of TEA, Mr K M Subramanian, said that Bangladesh would have duty-free access to Europe till 2027. However, with India expected to sign a trade agreement with the UK, Indian garments will be competitive and hence, large retailers were already looking for suppliers and booking factories in the country.

In the coming months, the south Indian town is expected to register an almost ten per cent growth in exports.

One factor that could be a big help for Tiruppur’s garments exports is that small retailers in Europe are thought to have exhausted their inventory and, therefore, are beginning to buy now.

A point to highlight here is that almost twenty per cent of MSME exporters in Tiruppur went out of business because of the decline in orders last year. Existing units, which are running to full capacity now, are planning capacity additions and therefore, Tiruppur’s garments sector is beginning to perk up.

OECD Ups India’s FY 25 GDP Growth Projection To 6.6 Per Cent

The Organisation for Economic Co-operation and Development (OECD) has upped its growth forecast for the country by 40 basis points (bps) to 6.6 per cent for this fiscal (FY 25). The organisation feels that a buoyant public investment and improved business confidence would help fuel India’s GDP growth this fiscal.

“Domestic demand will be driven by gross capital formation, particularly in the public sector with private consumption growth remaining sluggish. Exports will continue to grow, especially of services such as information technology and consulting where India will continue to increase its global market share, supported by foreign investment,” it said in its latest Economic Outlook.

It also said that private consumption has been less vigorous, confirming the preliminary findings from the latest household consumption expenditure survey.

“Some high frequency indicators, including on e-way bills, toll collections and new vehicle and scooter sales are suggesting increasing activity. Other indicators such as digital payment transactions and cement output remain relatively flat,” the outlook observed.

OECD further said that more needed to be done to address indebtedness by increasing revenues, improving spending efficiency and stronger fiscal rules.

The outlook also mentions that fiscal consolidation is appropriate in the current context, given the high level of public debt, which holds back private investment.

“Fiscal consolidation, while necessary, will weigh on public investment and be offset only partially by stronger private investment as business confidence improves. Household consumption is not expected to accelerate amid disappointing job creation, lukewarm rural performance and still tight finance conditions,” the outlook stated.

Atanu Chakraborty Re-appointed Part-Time Chairman of HDFC Bank

HDFC Bank has informed that the Reserve Bank of India (RBI) has approved the re-appointment of Mr Atanu Chakraborty as its part-time Chairman for a period of three years.

The bank is India’s largest in the private sector banking space.

In a notification to the stock-exchanges, the private sector bank said that the re-appointment has been approved from May 5, 2024 to May 4, 2027.

Mr Chakraborty is currently the Part-Time Non-Executive Chairman and Independent Director of the bank. He has also served the Government of India (GoI) for a period of 35-years, as a member of the Indian Administrative Service (IAS) belonging to the Gujarat cadre.

He mainly worked in the areas of finance and economic policy, infrastructure, petroleum and natural gas.

In the union government, he held various posts such as Secretary to the Government of India in the Ministry of Finance—Department of Economic Affairs (DEA) during the period FY 2019-20.

Mr Chakraborty graduated with a Bachelor in Engineering (Electronics & Communication) from NIT Kurukshetra. He holds a Diploma in Business Finance (ICFAI, Hyderabad) and a Master’s in Business Administration from the University of Hull, the UK.