The future, they say, is uncertain. True. In India, policy and design are fraught with inadequacies. The basic mantra of development informs us that 'what is measured can be bettered'. However successive governments have struggled to know and analyse the facets of the economy — growth, employment/unemployment, income, poverty, production and consumption. The many gaps and inconsistencies in the data landscape render the past fuzzy and the present tense.
This month marks seven years of the goods and services tax. It is verily work in progress — the multiplicity of rates, misaligned classification, the exclusions are yet to be dealt with. But there is no denying it has provided the states and the Union government visibility and predictability of revenues to plan allocations for development expenditure. As Finance Minister Nirmala Sitharaman pointed out, GST collections boosted revenue of states by over Rs 9 lakh crore.
The induction of GST has enabled ridding the system of multiple layers of taxation, propelled formalisation of the economy and established a large common market. The GSTR system — with all its troubles and history — has provided a window into the paradigm of India's continental-size economy
Is Good News/Bad News?
Apparently not all good news is good! In an intriguing, rather inexplicable move, the government has ceased placing the data on GST tax collections, including the regional variations in collections across states, in the public domain. As of July, what is known is the gross collection figure for the month of June — Rs 1.74 lakh crore. But the details have not been shared by press release as was done by the PIB in May 2024 or on the GST website.
The chatter in policy circles, and the buzz, as per a media report, is that this has been done because the high collections have created resentment among the people on rising collections. Presumably, this is a response to the anger expressed by voters in the general elections about inflation and cost of living. Of course, there is no official communique signalling the change in stance on data dissemination — neither is it clear if states have acquiesced.
The sudden and mystifying move flies in the face of logic and reasonable expectations in any open economy — particularly one which is the fastest-growing large economy and is ranked the fifth largest in the world. It begs the question if people feel or perceive differently because the information is not in the public domain? Does this mean inflation data — since that is a piece of the angst — will be shielded? What about data on personal tax collections or the quarterly gross domestic product estimates — would people feel offended if the economy is doing well?
Open Up GST Database
It is therefore imperative that the move — if it is an official move since that is far from clear — to restrain release of information is reviewed. For starters, it may be a good idea to set up a core group of secretaries under the finance secretary to dive deep into the data and share insights which can inform and scaffold policy.
There is no cogent explanation yet why the granular data of GST collections is out of public reach. Perhaps the core group in the Ministry of Finance could craft the rules of engagement for the sharing of data. An old occidental saying suggests a thousand eyes and a thousand hands can perceive problems and provide solutions. Ergo, there is a strong case for opening up the GST data even if with some delay to researchers — in the RBI, the NIPFP, NCAER, IGIDR, ICRIER and academics at universities and analysts at banks, investment banks and pension funds.
It is instructive to note that the GST collections data has served as an indicator of the robust growth of India's economy and is frequently cited as a proxy for the production, consumption, strong macro fundamentals and the scale of the spending power of the domestic market. The rise in collections since 2017 represents the resilience of the economy and has served as one of the dots triangulated with others to measure the health of the India story.
Bounty Of Rich Insights
The GST database is an unexplored cache. As of June 2024, GST database hosts seven years of information, which could yield a bounty of riches in terms of insights. To start with, let us look at what the GST database contains. Consumption represents over 585 of India's GDP and the GST data reveals the trends in consumption of over two thirds of goods and services.
Exploration of the underlying data will reveal growth at sub-regional levels — both in terms of production and consumption. The rise and consistency in collections can lead to an understanding of new investments, capacity additions, employment and new pockets of income growth. Indeed regimes ruling in the states can compare what is driving investment and growth, say in Tamil Nadu or Maharashtra, and seek notes on best practices.
India is attracting investments under the China+1 model as the world shifts supply chain arrangements to meet the need for resilience. This has driven up imports and also boosted exports. It would be useful to understand how this is panning out in terms of inputs and output. The GST data, if analysed using IGST collections as a filter, could also present a view on import-dependent output and import-based exports across states.
State governments could also seek focussed information on backward regions. The Centre has been monitoring development in the most backward regions through the 112 aspirational districts programme. It is possible that using data analysis tools the government could arrive at an index of improvement — which of the 150 aspirational districts are doing better in employment, incomes and consumption.
Also Read: The 2024 Midterm Trend Report
Tracking Earners And Consumers
A recent Crisil Report analysed available data to provide a view of how states performed with a view of per-capita consumption. The analysis signals the potential for deeper insights. To appreciate this, consider this: the provisional estimates of 2023-24 GDP released in May 2024 reveal that while overall growth was 8.2%, private final consumption expenditure stalled at around 4%.
The average figure of any measure calls for analysis of specifics. Analysis of the GST collections could yield answers about where consumption is sub-par and its causation — and indeed present a geographical and sectoral view of what is consumed where, including a split on the rise of e-commerce.
It is well established that cross referencing and data analysis of GST returns has enabled the Centre to identify pockets of new output and income, and resulted in higher personal and corporate taxes. The GST system now has the systemic capacity to track output in formal and informal sectors including the gig economy. It is arguable that the cross referencing can provide where the incomes are coming from and triangulate a snapshot of employment in emerging sectors.
There is no doubt that the GST database is a veritable treasure of valuable insights. The terabytes of riches are located in the vaults of the government. It would be a travesty if short-termism and systemic lethargy is allowed to prevail. The exploration and interrogation of the data affords India insights, which are critical for designing policy to achieve the $10 trillion target.
Shankkar Aiyar, political-economy analyst, is the author of 'Accidental India - A History of the Nation’s Passage through Crisis and Change', 'Aadhaar: A Biometric History of India's 12-Digit Revolution' and 'The Gated Republic: India’s Public Policy Failures and Private Solutions.' He posts on X @ShankkarAiyar
Disclaimer: The views expressed here are those of the author and do not necessarily represent the views of NDTV Profit or its editorial team.
RECOMMENDED FOR YOU
. (Photo_ Vijay Sartape_ Source_ BQ Prime).jpg?rect=0%2C0%2C3500%2C1969&w=75)
SBI Share Price Rises As Jefferies Reiterates It As Top Pick
Nov 22, 2024
Corporate Push: Behind SBI's Blistering Wholesale Loan Growth
Nov 21, 2024
Top 10 Most-Valued Firms Lose Over Rs 24,000 Crore In Market Cap, Led By Reliance Industries, SBI
Nov 19, 2024
 11_07_24 (1).jpg?rect=0%2C0%2C3500%2C1969&w=75)
Festive Effect: GST Mop-Up Grows 9% To Rs 1.87 Lakh Crore In October
Nov 01, 2024
POPULAR