The GST collection figures, notes Aditi Nayar, Chief Economist, ICRA, displays an impressive double-digit expansion and reflecting the collections for the previous month, which typically include year-end adjustments made by the taxpayers.

Underscoring the robust health of the Indian economy, gross Goods and Services Tax (GST) collections hit a record high in April 2024 at ₹2.10 lakh crore, representing a significant 12.4 per cent year-on-year growth. The surge was driven by a strong increase in domestic transactions which registered 13.4 per cent increase and imports which accounted for 8.3 per cent increase, the Finance Ministry said on Wednesday. After accounting for refunds, the net GST revenue for April 2024 stands at ₹1.92 lakh crore, reflecting an impressive 15.5 per cent growth compared to the same period last year.

“GST collection crosses ₹ 2 lakh crore benchmark,” said Finance Minister Nirmala Sitharaman in a tweet, attributing the achievement to “the strong momentum in the economy and efficient tax collections. “Congratulations to the Central Board of Indirect Taxes & Customs, Department of Revenue, all officers at the state and central levels. Their sincere and collaborative efforts has achieved this landmark,“ Sitharaman said. The finer print of April 2024 collections reflects positive performance across components with Central GST (CGST) at ₹43,846 crore and state GST (SGST) at ₹53,538 crore. The integrated GST (IGST) collection was ₹99,623 crore, including ₹37,826 crore collected on imported goods.

The cess collection was ₹13,260 crore, including ₹1,008 crore collected on imported goods. The GST collection figures, notes Aditi Nayar, Chief Economist, ICRA, displays an impressive double-digit expansion and reflecting the collections for the previous month, which typically include year-end adjustments made by the taxpayers. In the month of April, 2024, the Central Government settled ₹50,307 crore to CGST and ₹41,600 crore to SGST from the IGST collected. This translates to a total revenue of ₹94,153 crore for CGST and ₹95,138 crore for SGST for April 2024 after regular settlement. “This IGST settlement of ₹91907 crore is ₹4,413 crore more than the actual net IGST collections of ₹87,494 crore and stands settled by the Central Government. There are no dues pending on account of IGST settlement to the states,” the Finance Ministry said.

Economists have lauded the GST collections with Shravan Shetty, Managing Director at Primus Partners observing that the 12.4 per cent y-o-y increase in GST points to the fact that growth is driven by both an increase in goods produced and the formalisation of the economy driven by increasing compliance. “April typically has the highest collection of GST in a year as seen last year,” points out Shetty, who expects coming months to be close to the 1.7-2 lakh crore mark which should pick up as India enters the festive season post rainy season.

Key factors to consider for the coming months, as per Shetty, would be the current heat wave and the impact of it on manufacturing and services output. “Also, the coming monsoon will impact the agricultural and rural economy which will determine GDP growth and GST collections in the second half of the year,” Shetty adds. Nayar anticipates that the CGST collections exceeded the FY2024 revised estimate by Rs 250- 300 billion, suggesting an embedded growth of 9 per cent to meet the target set in the Interim Budget Estimates for FY2025,” said Nayar. According to the Finance Ministry’s monthly economic review last month, March 2024 witnessed a significant milestone in India’s tax revenue landscape, particularly in GST collections.

The gross GST revenue for the month stood at an impressive ₹1.78 lakh crore, a substantial 11.5 per cent year-on-year growth. The increase was primarily driven by domestic transactions that witnessed a huge surge. Collection from domestic transactions signifies a buoyant domestic economic landscape, instilling optimism and bolstering overall revenue accruals.

Furthermore, the steady rise in average monthly collections by approximately ₹18,000 crore throughout the year underscores a compelling narrative of robust growth and economic recovery. With March concluding the fiscal year 2024, the uptick in GST collections not only reflects robust compliance but also signifies an expansion in the ambit of GST, covering a broader spectrum of economic activities within its purview, the Finance Ministry said.

Home prices in India are likely to increase by 4-6 per cent this year but rising per capita income will support demand.

A real estate consultancy firm reported a 10% increase in the sales of luxury homes priced at Rs 4 crore and above during the quarter ending on March 31 compared to the previous year. According to CBRE’s ‘India Market Monitor Q1 2024’ report, 4,140 luxury homes were sold between January and March 2024, compared to 3,780 sold during the same period last year.

This growth trend has persisted for the past two years, with sales surging by 75% in 2023 to 12,935 units. Additionally, the share of luxury homes in total sales doubled to 4% in 2023 from 2% the previous year. At the end of March 2024, their share has risen to 5 per cent. Mumbai led in the March quarter by selling 1,330 luxury homes: 15 per cent higher than 1,150 units sold last year.

It was followed by Delhi National Capital Region (NCR) at 1,150 units and Hyderabad at 800 units. While Hyderabad saw a twofold jump in luxury home sales, demand for such properties in Delhi NCR fell from 1,880 units in the same quarter last year. Residential property sales across categories reached 85,000 units in January-March, growing 8 per cent year-on-year.

The largest sales were in the mid-end segment homes (priced between Rs 45 lakh to 1 crore) which compised 47 per cent share in total sales. It was followed by high-end (Rs 1 – 2 crore) and affordable projects (up to Rs 45 lakh). Luxury home sales ranked fifth. Pune, Mumbai, and Bangalore cumulatively accounted for about 65 per cent of the total sales. The report said the demand has also led developers to focus on luxury homes. In the March quarter, there was a 64 per cent increase in new launches of luxury segment units.

“The Indian luxury real estate sector demonstrates robust fundamentals for sustained expansion, underpinned by consistent increases in household income and consumer spending power,” said Anshuman Magazine, chairman and chief executive officer (India, South-East Asia, Middle East & Africa) at CBRE. “These factors are anticipated to cultivate a segment characterized by discerning buyers prioritising quality, financial prudence, and a desire for an elevated living experience.”

In a move aimed at strengthening bilateral trade and investment ties between Russia and India, the Chamber of Commerce and Industry (CCI) of the Russian Federation has inaugurated its second office in Mumbai. The opening ceremony was attended by a high level business delegation led by Sergey Katyrin, President of the CCI of the Russian Federation. “India is a strategic, reliable, old friend of Russia. We already have a representative office in Delhi, and now we are here to inaugurate the 2nd representative office of CCI in India at Mumbai,” said Katyrin, highlighting the significance of the occasion.

The CCI, representing over 53,000 business organizations and more than 280 business unions at the federal level, along with 750 unions at the regional level in Russia, aims to foster closer ties with India through its expanded presence in Mumbai. With more than 100 bilateral agreements signed with various countries and 30 representative offices across the globe, the decision to open a second office in India underscores the growing importance of the India-Russia business relationship.

Katyrin emphasized that both representative offices will play a pivotal role in promoting bilateral trade, investment, and technology collaboration for Russian companies in India, as well as facilitating opportunities for Indian companies in Russia. Addressing the issue of the current lopsided bilateral trade, Katyrin stated that the representative offices will work towards correcting the trade deficit by facilitating India’s exports. Aleksei Surovtsev, Consul General of the Consulate General of the Russian Federation, highlighted the significant progress made in India-Russia trade relations, with Russia now ranking as India’s 4th largest trade partner, up from the 20th position just two years ago.

The bilateral trade in goods and services has exceeded USD 55 billion, indicating the immense potential for further strengthening the partnership between the two nations. Vijay Kalantri, Chairman of MVIRDC World Trade Center Mumbai, commended the enduring friendship between India and Russia, noting that bilateral goods trade has surpassed the USD 50 billion mark this year. He expressed optimism that with sustained efforts, the two countries could achieve a trade volume of over USD 100 billion in the next three years.

The opening of the second CCI office in India comes at a crucial juncture, as both countries seek to deepen economic cooperation and explore new avenues for collaboration across various sectors. With Russia emerging as a key player in India’s trade landscape, the expanded presence of the CCI in Mumbai is expected to catalyze further growth in bilateral trade and investment flows.

Finance Minister Nirmala Sitharaman on Monday called for active participation in the Government’s mission of ‘Viksit Bharat’ which has emerged as a peopledriven movement and catalyst for the nation’s significant transformation. Highlighting the impressive strides taken over the last decade in advancing India towards Viksit Bharat during her keynote address at GITAM University’s Vizag Campus for the Viksit Bharat Ambassador Campus Dialogue programme, Sitharaman enlightened the audience about India’s economic growth over the years which, despite the country’s own efforts to make people’s lives better, were not effective. Recalling the stifling environment because of the way the economy was ordered with a ‘one-size-fits-all’ solutions, Sitharaman noted the year 1991 when the economy was opened up.

“New opportunities arose, more resources came from abroad, which made us change and grow. Despite this, many things that could have happened didn’t happen. We realised that opening up has also not helped India.” the Finance Minister said, stressing on the impressive strides taken over the last decade in advancing India towards Viksit Bharat as compared to the 10 years before 2014 which were “lost to bad policies and corruption”. Sitharaman rued that the economy had declined from where it was in 2004. From the 12th rank in 2004 to 10th in 2014, she questioned India’s modest move up to two points in those 10 “dark years”. Under the leadership of a visionary Prime Minister, India rose to the 5th rank by ending all corruption and despite COVID. “In his third term, India will become the third-largest economy,” Sitharaman said.

During her address, the Union Minister pointed out key factors essential for India to ensure its GDP’s growth. While the Prime Minister has set a target by 2047 to reach the destination of a developed India, efforts are required at micro and macro levels and on the ground so that the GDP grows and the benefits reach to all, the Finance Minister reminded. “GDP growth doesn’t happen automatically. The image of the country is also important, along with the ranking of your GDP. All these matters, along with per capita income calculations.

Unless the GDP is widened, we are not going to be able to meet the demands of the economy. We need investment, services to grow, educational institutions, and money for people to buy houses, start businesses,” said Sitharaman. Inspiring students to become ‘Viksit Bharat Ambassadors’ and lead the journey with their potential as drivers of change and growth of the nation, Sitharaman emphasised on the important role of the youth in the Viksit Bharat mission, she pointed out the need for ‘Viksit Bharat’ ambassadors to counter naysayers. “We need to become a developed country for our own sake and for the sake of a bright future for India,” said the Finance Minister.

Sitharaman also interacted with the attendees, sparking a lively exchange of ideas and inquiries from students about India’s economic progress, tax reforms, banking reforms, and budget allocation to the education sector, and many more. In a session with leading professionals and entrepreneurs from the city, the Finance Minister discussed a range of issues on the significant progress made over the past decade, the journey from economic progress to the startup ecosystem boom and the crucial role professionals play in driving the nation forward.

Entrepreneurs and professionals also drew attention to improving the ease of doing business, incentivising entrepreneurship, fostering an environment for international trade, supporting small and medium enterprises, and more. The ‘Viksit Bharat Ambassador Campus Dialogue’ is aimed at empowering students to become ambassadors for building a developed India.

There are tremendous opportunities in places like Vizag, where there is a medtech zone with over thousands of employees and people developing biomedical devices and manufacturing medical equipment and addressing preventive healthcare issues etc.

In a comprehensive analysis conducted by Crisil Ratings, it has been revealed that corporates in India experienced a modest 4-6 per cent revenue growth in the January-March quarter of the fiscal year, marking the slowest quarterly growth since the recovery from the Covid-19 pandemic began back in September 2021. This analysis, which encompassed 350 companies excluding financial services and oil and gas sectors, sheds light on the prevailing economic landscape and provides insights into sectoral performances.

Despite this moderation, it’s important to note that the slowdown occurred against the backdrop of a higher base from the previous year. Among the 47 sectors monitored by Crisil, only 12 are anticipated to have demonstrated an improvement in revenue growth both sequentially and year-on-year for the quarter under review.

Consumer discretionary products and services emerged as the frontrunners in the quarter, with the automobile sector witnessing healthy growth in passenger vehicles attributed to increased volumes and price adjustments implemented over the past year. Organised retail, for the thirteenth consecutive quarter, continued its growth trajectory fueled by robust urban demand. Additionally, discretionary services such as airlines and hotels experienced a resurgence driven by the resurgence of MICE activities, weddings, and the rebound in corporate travel segments.

Conversely, sectors linked to construction experienced tepid revenue growth, primarily due to the high base effect from the fourth quarter of fiscal 2023 when construction companies recorded their highest quarterly revenue. In the cement sector, despite steady demand momentum, revenue growth remained subdued as prices faced pressure amid heightened supply and fierce competition.

Miren Lodha, Senior Director at CRISIL MI&A Research, provided valuable insights into the outlook for corporate revenue growth. Despite the slower pace witnessed in the March quarter, corporate revenue is estimated to have expanded by 8 per cent in fiscal 2024. Looking ahead to fiscal 2025, revenue growth is projected to improve to 9-10 per cent, driven by sectors less reliant on commodities and predominantly catering to the domestic market. Notably, consumer discretionary segments, encompassing both goods and services, are poised for growth despite the gradual easing of pent-up demand post-pandemic. Moreover, the consumer staples segment is anticipated to witness an acceleration in growth propelled by the resurgence of rural demand.

On the margin front, there is optimism as an improvement of 100 basis points is estimated year-on-year in the March quarter. Overall, earnings before interest, tax, depreciation, and amortization (EBITDA) margins for the 350 companies continued to expand throughout fiscal 2024, indicating resilience and adaptability amidst evolving market conditions.

The findings from Crisil’s analysis underscore the nuanced dynamics within India’s corporate landscape, with certain sectors demonstrating resilience and growth while others navigate challenges posed by the evolving economic environment. As businesses adapt and strategize to navigate uncertainties, these insights provide valuable guidance for stakeholders and policymakers alike in shaping the trajectory of India’s economic recovery. As the corporate sector navigates through challenges and opportunities, insights from Crisil’s analysis serve as a compass, guiding stakeholders towards informed decisions for a resilient and dynamic economic future.

The Federation of Indian Export Organisations (FIEO) has raised concerns over the escalating geopolitical tension, indicating potential implications for India’s exports in the first quarter of 2024-25. According to FIEO Director General Ajay Sahai, the ongoing war between Russia and Ukraine has already affected India’s outbound shipments in 2023-24, resulting in a decline of 3.11 per cent to USD 437 billion.

Imports also experienced a significant dip of over 8 per cent to USD 677.24 billion during the same period. Sahai highlighted that if the current global uncertainties persist, they are likely to impact global demand, potentially leading to a slowdown visible in the first quarter numbers. He noted that despite ongoing challenges, freight rates are softening, signalling potential future impacts on demand. Sahai further cautioned that further escalation of the current geopolitical situation could have serious implications for world trade.

The director general also cited high inflation, high interest rates, and geopolitical uncertainties as crucial reasons for the demand slowdown. He expressed concerns about certain advanced economies like Europe possibly experiencing more pronounced slowdowns. Additionally, Sahai mentioned that the ongoing Israel-Iran conflict has already affected certain exporters, particularly in the engineering sector, with reduced demand observed for goods destined for the UAE and then to Iran.

Sahai urged the government to take steps to support port exporters, particularly on the liquidity front, suggesting the continuation of the interest equalization scheme and enhancement of rates to 3 per cent and 5 per cent. He emphasized the importance of technology and knowledge-based sectors in achieving India’s export target of USD one trillion by 2030, while also expressing concerns about declining market share in labour-intensive sectors like apparel, footwear, and gems and jewellery.

Furthermore, Sahai highlighted the need for the government to provide support to exporters in managing longer payment cycles from foreign buyers due to the demand slowdown. He stressed the importance of extending funds for a longer period and advocated for interest subvention support to facilitate smoother operations for exporters.

Addressing the liquidity concerns of exporters, Sahai called for the continuation of the interest equalization scheme, which provides subsidies to exporters for pre- and post-shipment rupee export credit. He urged the government to enhance the scheme’s rates to 3 per cent and 5 per cent to further support exporters amid challenging global economic conditions. Sahai emphasized the pivotal role of technology and knowledge-based sectors such as electronics, telecommunications, pharmaceuticals, and automotive industries in driving India’s export growth.

However, he expressed concerns regarding the declining market share in labour-intensive sectors like apparel, footwear, and gems and jewellery, underscoring the need for strategic interventions to address the challenges faced by these sectors. In short, FIEO’s observations underscore the multifaceted challenges confronting India’s export sector amidst escalating geopolitical tensions and global economic uncertainties.

While acknowledging the impact of geopolitical conflicts and macroeconomic factors on export performance, Sahai’s recommendations advocate for proactive measures to support exporters and sustain India’s export momentum in the face of evolving challenges.

As India navigates the complexities of the global trade landscape, concerted efforts from both the government and industry stakeholders will be essential to mitigate risks and capitalize on opportunities for sustainable export growth.