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. Having recorded the lowest contraction in seven months (0.1 per cent) in September, the output of eight core industries, which have an almost 40 per cent share in the index of industrial production, slid by 2.6 per cent in November, thanks primarily to a drop in cement and steel. Similarly, railway freight rose in November but electricity demand was down.
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First Published: Tue, January 05 2021. 21:48 IST