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India's GST Bounces Back Strongly
20 Nov
Summary
- GST revenue expected to rebound to 10% growth in November.
- Government confident in meeting fiscal deficit targets.
- GST tax base has more than doubled since 2017.
India's Goods and Services Tax (GST) revenue is projected for a strong recovery in November, with growth expected to rebound to around 10% after a dip in October. This surge is anticipated despite recent rate rationalizations, signaling economic resilience and robust demand. Monthly collections are estimated to reach approximately ₹2 trillion, bolstering government confidence.
The recent overhaul of the GST structure, simplifying slabs and reducing rates, is seen as a stimulus for consumption and investment. Experts note that such rate adjustments have historically led to a subsequent pick-up in revenue. The expanding tax base, further supported by streamlined registration processes, also contributes to sustained revenue buoyancy.
This robust GST performance is crucial for the government to meet its fiscal deficit target of 4.4% for FY26, especially as direct tax collection growth lags. The positive trend underscores the effectiveness of the GST framework in fostering compliance and economic growth, with sectors benefiting from rate cuts showing improved market sentiment.
