GST's high point

More than recovery, better compliance has improved collection

Goods and services tax (GST) collection reached a record Rs 1.15 trillion in December, witnessing a growth rate of 11.6 per cent over the same period last year. This is also the third consecutive month of collection in excess of Rs 1 trillion. The increase is being seen as a sign of strong economic recovery but the data should be treated with caution. While economic activity continues to recover from the Covid-induced shutdown, the signals are mixed. For example, the latest reading on the purchasing managers’ index (manufacturing) is encouraging but the same cannot be said for the core sector.