The gross GST revenue collected in India in June totalled £9.09 billion which augurs well as economic activity gathers pace. But it also marked the third straight month of decline year-on-year. Data released by the government showed that the revenues for the month were 91% of the GST revenues in the same period last year. GST revenues have been hit hard by the impact of the lockdown unveiled to ward off the spread of the coronavirus pandemic, with April and May showing a major impact. The government had also eased rules to allow firms to file returns late.
A government statement said figures of the past three months show recovery in GST revenues. Collections for the month of April were £3.23 billion, which was 28% of the revenue collected during the same month last year, and for May it was £6.20 billion, accounting for 62% of the revenue collected during the year earlier period.
Returns for the month of April, March as well as some returns of February got filed during June 2020 and some returns of May, 2020, which would have otherwise got filed in June, will get filed during first few days of July, the statement said.
Separate data showed contraction in manufacturing eased significantly. At 47.2 in June, the IHS Markit India Manufacturing PMI surged from 30.8 in May. Despite the rise, the latest reading pointed to a third successive monthly decline in the health of the manufacturing sector, albeit one that was far softer than registered in April and May, according to the PMI survey. It showed that firms continued to reduce staff numbers at a marked pace.
Looking forward, firms remained positive towards the 12-month business, with sentiment strengthening to a four-month high. That said, the degree of optimism remained far weaker than the historical average amid fears of a prolonged economic downturn due to the coronavirus outbreak, the survey showed.
“India’s manufacturing sector moved towards stabilisation in June, with both output and new orders contracting at much softer rates than seen in April and May. However, the recent spike in new coronavirus cases and the resulting lockdown extensions have seen demand continue to weaken. Should case numbers continue rising at their current pace, further lockdown extensions may be imposed, which would likely derail a recovery in economic conditions and prolong the woes of those most severely affected by this crisis,” said Eliot Kerr, economist at IHS Markit.
