OFFSETTING GAINS

India's GST collections hit a record high, but inflation gobbles up the gains for consumers

Moody’s Pegs India’s FY25 Growth At 6.6% 

Moody’s Ratings has pegged India’s economic growth in the current fiscal year (FY25) at 6.6%. This forecast is lower than the Reserve Bank of India (RBI) and several other agencies. The RBI has projected a 7% growth for the current fiscal year, a figure also supported by the Asian Development Bank (ADB) and Fitch. S&P Global Ratings and Morgan Stanley expect a growth rate of 6.8%.

On the subject of Non-Bank Finance Companies (NBFCs), Moody’s Ratings indicated that strong credit demand coupled with robust economic growth would support the sector. “Funding costs for NBFCs in India are rising, but strong credit demand fuelled by the country’s robust economic growth will support the sector’s profitability. Additionally, robust economic conditions will help them preserve their asset quality, even as rises in interest rates increase the debt burdens of their customers,” Moody’s stated. 

GST Collection In April At A Record ₹2.10 Tn

Goods and Services Tax (GST) revenue collection reached a record ₹2.10 trillion in April this year, reflecting robust economic growth in the country. This marks the first time since the GST regime was implemented in 2017 that collections have breached the ₹2 trillion mark.

The Finance Ministry attributed this record collection to a significant 12.4% year-on-year (y-o-y) growth, driven by a 13.4% increase in domestic transactions and an 8.3% rise in imports. After accounting for refunds, the net GST revenue for April stood at ₹1.92 trillion, 15.5% higher than the same period last year.