GST Impact on Gross Domestic Product (GDP) in India

The biggest tax reform i.e. Goods and Services Tax is now a part of the Indian Economy. A new and unified tax structure is followed for indirect taxation on the place of various tax laws like Excise duty, Service Tax, VAT, CST, etc. and for sure the new tax regime is determined to eliminate the cascading effect of tax on transaction of products and services, and it will result in availability of product and services to consumers at a lower price.

In the aftermath of many corona pandemics, the economy of India has been ruined and devastated. While giving an address to media first time after taking over as CII President TV Narendran commented that The Indian economy shall need a fiscal stimulus worthy and worth Rs 3 lakh crore along with temporary GST rate cuts and direct cash transfers so as to recover the ongoing loss of business that is mostly worsened by an existing demand slump. The other reason he put forth was to quickly restart the flagging private investment cycle.

“The cumulative impact of the two waves on incomes and consumer sentiment, coupled with the increase in household medical expenses in the second wave, is likely to affect consumer demand for some time,” said Narendran.

Though, the government has enlarged the domain of the emergency credit scheme, CII recommends it to extend to machine tools and retail sectors also. Other suggestions were to include the enhanced MNREGA allocations; LTC cash voucher scheme, time-bound tax relief duty concession for homebuyers; and adding a further stretching of the Aatmanirbhar Bharat Rozgar Yojana till March 31, 2022. Narendran fixed the GDP growth rate for Financial Year 2022 at 9.5%.

GDP Data for FY 2023-24 4th Quarter (January to March 2024)

The National Statistical Office (NSO) by the Ministry of Statistics and Programme Implementation (MoSPI), released India’s Gross Domestic Product (GDP) for the 4th quarter ending March 31, 2024 (Q4 FY24) witnessed a growth of 7.8 per cent.

GDP Data for FY 2023-24 3rd Quarter (October to December 2023)

As per the latest GDP data released by the Statistics Ministry on Thursday, February 29, India’s Q3 GDP (October-December 2023) has emerged as the fastest-growing major economy in the world. The economy of India grew a remarkable 8.4 per cent during the October-December quarter of the current financial year 2023-24 (Q3FY24).

The amazing growth rate can be attributed to the strong performance of the manufacturing and construction sectors, which were maintained by high domestic demand. These sectors have played a crucial role in driving India’s economic growth, making it one of the most promising markets for businesses and investors around the world.

GDP Data for FY 2023-24 2nd Quarter (July to September 2023)

The Indian economy has shown an impressive growth rate of 7.6% in the second quarter of the current financial year 2023-24, which is much higher than the 6.2% growth witnessed in the second quarter of the previous fiscal year. This growth rate was much better than what most analysts had predicted, expecting it to be around 6.8%. However, it is important to note that this growth rate is slightly lower than the 7.8% growth rate observed in the first quarter of FY24. Overall, this positive growth trend is a promising sign for the Indian economy and its prospects. Read PDF

GDP Data for FY 2023-24 1st Quarter (April to June 2023)

During the first quarter of the fiscal year 2023-24, the Gross Domestic Product (GDP) of India grew 7.8 per cent, according to data released by the National Statistical Office (NSO). In comparison to the previous quarter, the growth rate was 6.1%. Growth was slower than the 13.1% recorded in the first quarter of fiscal year 2022-23. In April-June, India continued to expand faster than China, which had a growth rate of 6.3%. Read PDF

GDP Data for FY 2022-23 4th Quarter (January to March 2023)

India’s GDP for Q4FY23 exceeded expectations, with a growth rate of 6.1% compared to the anticipated 5.5%. The overall growth for FY23 stood at 7.2%, although it represented a decline from the previous fiscal year’s 9.5% growth. Economists are optimistic about India’s economic outlook for FY24, with projections of a 6.0% real GDP growth. However, the possibility of El Nino affecting monsoon rains poses a downside risk.

On the positive side, increased government and state-level capital expenditure, as well as swift implementation of infrastructure projects, could uplift GDP estimates. In terms of inflation, experts predict a moderation in FY24, benefiting household budgets and consumption. Nevertheless, challenges persist, including the impact of rising home loan EMIs on urban households, the contraction in exports and its implications for employment, and the potential effects of El Nino on crops, food prices, and farm incomes.

GDP Data for FY 2022-23 3rd Quarter (October to December 2022)

The GDP growth has been slowed down to 4.4% from 6.3% in the 2nd quarter (Q2) of 2022-23 between October to December 2022 under the norms of the National statistical office (NSO) that maintains its full-year growth approximately to 7% economy, despite revising the GDP growth estimate for 2021–22 from 8.7% to 9.1%.

GDP Data for FY 2022-23 2nd Quarter (July to September 2022)

The September quarter of 2022-23 saw India’s economic growth slow to 6.3 per cent from 13.5 per cent in the previous quarter, mainly due to contractions in the manufacturing and mining sectors.

According to the National Bureau of Statistics, the GDP grew by 13.5% in the previous April-June quarter of 2022-23, compared with 8.4% in the same quarter of 2021-22. In its report earlier this month, the Reserve Bank of India (RBI) predicted that GDP growth for the second quarter would range from 6.1 to 6.3%. Read Press Release

GDP Data for FY 2022-23 1st Quarter (April to June 2022)

GDP Data for FY 2021-22 4th Quarter (January to March 2022)

In the fourth quarter of the former fiscal year, India’s GDP growth dropped to 4.1% which is the sluggishest in a year. But the economic growth outperformed the forecast. Towards the full fiscal year of 2022, the National Statistical Office (NSO) specified that it has diminished its economic growth estimate to 8.7% which is less than the former expectations of 8.9%, NSO stated that the GDP readings from January to March quarter specified that the economic growth was somewhat higher than the expectation of the economists which was 4%, as per the Reuters poll of economists. Comparison Asia’s third-largest economy increased by 20.3%, 8.5%, and 5.4% correspondingly in the first three quarters of the financial year 2022.

GDP Data for FY 2021-22 3rd Quarter (October to December 2021)

According to data released by the Ministry Of Statistics And Programme Implementation Monday, the Indian economy grew by 5.4% year-over-year during the third quarter. It is now the fifth consecutive year that India’s economy has grown positively. Despite a slower pace of growth than in the previous two quarters, the risks associated with higher crude oil and commodity prices increased after Russia’s invasion of Ukraine.

GDP Data for FY 2021-22 2nd Quarter (July to September 2021)

India’s GDP is projected to be pegged at the 8.4% for the Quarter 2021-22 which is much contraction at the previous year’s 7.4%. The constant prices of the quarter 2 2021-22 is around INR 35.73 lakh crore. These data are as per the official table released by the central government Union ministry of statistics and program implementation.

GDP Data for FY 2021-22 1st Quarter (April to June 2021)

India’s GDP for the 1st quarter (April-June) of the FY 2021-22 rises by 20.1% as per the information of the government. The country is seen rising within the fastest growth in a quarter. The economic information concerned with the GDP growth rate is computed upon the YOY grounds. Thus a lower rise in the former year heightened to the low base for the present years’ numbers. So far the country has been affected from covid-19 and due to that, the country gets affected from April to June in the previous year. For the complete FY 2020-21 the economy of India has been shrunk by 7.3%.

GDP Data for FY 2020-21 4th Quarter (January to March 2021)

Prior to the 2nd wave of the coronavirus, the gross domestic product (GDP) has raised the 1.6% in the 4th quarter (Jan-March) of 2020-21. This had arrived upon the top of the 0.5% rise in the before quarter of October-December.

“GDP at Constant (2011-12) Prices in Q4 of 2020-21 is estimated at Rs 38.96 lakh crore, as against Rs 38.33 lakh crore in Q4 of 2019-20, showing a growth of 1.6 per cent,” the Ministry of Statistics & Programme Implementation (MoSPI) said in an official statement on 31st May 2021, continuing that the growth in GDP during FY 2020-21 is estimated at -7.3 per cent as compared to 4.0 percent in FY 2019-20.

GDP Data for FY 2020-21 3rd Quarter (October to December 2020)

Data released by the ministry of statistics and program implementation shows that GDP at constant (2011-12) prices in Q3 of 2019-20 was Rs 36.08 lakh crore. However, in Q3 of 2020-21, it is evaluated at ₹ 36.22 lakh crore which is showing a growth of 0.4 percent. Thus, after two consecutive harrowing quarters, finally, a GDP growth of 0.4 percent reported in the third quarter of 2020-21. With this, the country’s economy is now out of a technological recession.

Additionally, the NSO has also forecast an 8 percent contraction in 2020-21. It is worth noting that in its first advance estimates from January, it had projected a contraction of 7.7 percent for the current fiscal year against a growth of four percent in 2019-20. If we talk about the details of Q1 and Q2, the economy declined by 24.4 percent in the first quarter due to epidemics and lockdown, and by 7.3 percent due to a disturbance in economic activity in Q2 GDP.

GDP Data for FY 2020-21 2nd Quarter (July to September 2020)

Q2 GDP data slows down by 7.5% despite rising in the share market. The electricity consumption reported the highest growth along with labor participation and e-way bills. RBI posts that India in before month has reported Asia’s 3rd biggest economy which goes into recession.

In October 8 core industries seeks output at -2.5% vs -0.1% in the September month and -5.5% in Oct’19: Coal: 11.6%, Crude Oil: – 6.2%., Natural Gas: – 8.6%, Refinery Products: – 17.0 %, Fertilizers: 6.3 %, Steel: – 2.7 %, Cement: 2.8 %, Electricity: 10.5 %. Also, flood inflation will be reduced in the 3rd quarter. The recovery of India is gaining a higher rate.

GDP Data for FY 2020-21 1st Quarter (April to June 2020)

India GDP Q1 data 2020: due to pandemic following the strict lockdown in the 1st quarter if the financial year 2020-21 the net GDP in April-June quarter Q1 has declined by 23.9% as revealed by the Ministry of Statistics and Programme Implementation (MoSPI). With 5.2% the GDP had expanded in the relevant quarter 2019-20. “Despite local lockdowns, e-way Bills are at 99.9% year-on-year. Have to keep in mind that the pandemic will have its ebb and flow and that is not a short-term uncertainty,” said Chief Economic Adviser KV Subramanian.

GDP Data for FY 2019-20 4th Quarter (January to March 2020) (03/11/2020)

Gross Domestic Product (GDP) in the 4th Quarters during 2019-20 is revealed to be 4.2% slowing to the 11 years low with respect to the 6.1% in 2018-19 said in the report. The RBI had secured the GDP growth for 2019-20 at 5 % as proposed by the National Statistical Office on 1st and 2nd advance approximations published beforehand this year in January and February individually.

the Ministry of Statistics & Programme Implementation held that the “GDP at Constant (2011-12) prices in Q4 of 2019-20 is estimated at Rs. 38.04 lakh crore, as against Rs 36.90 lakh crore in Q4 of 2018-19, showing a growth of 3.1 percent,”

Chidambaram pops out at the financial administration of BJP “It has turned out to be worse at 3.1%. This is pre-lockdown. Of the 91 days of Q4, lockdown applied to only 7 days. It is a telling commentary on the economic management of the BJP government.”

GDP Data for FY 2019-20 3rd Quarter (October to December 2019)

Finally, the India gross domestic product figures have been revealed for the 3rd quarter (October to December 2019) and it has come to 4.7 per cent down from the 5.1 per cent in the 2nd quarter of (July to September 2019).

The lowered GDP for the third quarter has been acknowledged by the chief of the economic affairs Atanu Chakraborty and has blamed the NBFC crisis and weak rural growth for this slowdown. He has stated that the Indian GDP will once again rise to a high level as per the growth in certain industries.

GDP Data for FY 2019-20 2nd Quarter (July to September 2019)

Adding to the woes of the Indian Prime Minister and the Finance Ministry, the GDP (Growth Domestic Product) of India has further dropped down to 4.5% in the second quarter of FY 2019-29 from the earlier 5% GDP of the first quarter.

The same trend of the GDP felling has been going on for seven quarters now. While the first quarter of 2019-20 witnessed a GDP of 5%, the second quarter reported a fall of 0.5 per cent. During the same period last year, i.e. the second quarter of FY 2018-19, the GDP growth of the country was 7.1 per cent. Compared to that, the latest reported GDP is 2.6 per cent lower, which is also the lowest in the last six years.

GDP Data for FY 2019-20 1st Quarter (April to June 2019)

As per the recent data by CRISIL, the Indian economy may not see a rise over above 6.3% for the fiscal year 2020. The current data have opposed the previous suggestion of 6.9% GDP for the year.

The news is in the air due to the disclosure of the lowest 5% GDP of the country in recent years. As per the statement by crisil, “We expect growth to get some lift from the low base effect of 6.3 per cent in the second half of the FY19.”

There is a lowered 0.6% of GDP for the given financial years due to slowdown in the overall economy and revelation by the economics department responsible for foir the maintenance of the financial health of India.

GDP Data for FY 2018-19 Last Quarter (January to March 2019)

India’s GDP has been recorded at 7.7 percent in the quarter of January – March, with a fast approach towards better number than 7.0 in the previous quarter. With some expectations for 6.7 percent in the financial year 2018, to the 7.3 percent and 7.5 percent in the FY 19 and FY 20 respectively. There is some hindrance to the GDP number due to GST as speculated by the experts but still, many economists are likely to maintain around 6.5 percent.

So here in this article, we will see the GST impact on the Indian Economy.

Read Also: GST Impact on E-commerce Sector in India

GST Positive Impact of GDP

Now, There is only one tax rate for all which will create a unified market in terms of tax implementation and the transaction of goods and services will be seamless across the states.

The same will reduce the cost of the transaction. In a survey, it was found that 10-11 types of taxes levied on the road transport businesses. So the GST will be helpful to reduce transportation cost by eliminating other taxes.

After GST implementation the export of goods and services will become competitive because of nill effect of cascading effect of taxes on goods and products. In a research done by NCAER, it was suggested that GST would be the key revolution in Indian Economy and it could increase the GDP by 1.0 to 3.0 percent.

GST is more transparent in comparison to the previous law provision so it will generate more revenue to the Government and will be more effective in reducing corruption at the same time. Overall GST will improve the tax Compliances.

In a report issued by the Finance Ministry, it was mentioned that Make In India programme will be more benefited by the GST structure due to the availability of input tax credit on capital goods.

As the GST will subsume all other taxes, the exemption available for manufacturers in regards of excise duty will be taken off which will be an addition to Government revenue and it could result in an increase in GDP.

The GST regime has although a very powerful impact on many things including the GDP also. The Gross Domestic Product has the tendency to loom on the shoulders of revenue generated by the economy in a year. Still, a worthwhile point includes that the GST has the capability to extend the GDP by a total of 2 percent in order to complete the ultimate goal of increasing the per-capita income of every individual. Also, the GST scheme will certainly improve the indirect revenues to the government as the tax compliance will be further enhanced and rigid, extending the tax paying base which will add to the revenue. The increased income of the government will redirect towards the developmental projects and urban financing creating an overall implied scenario.

GST Negative Impact on GDP

In a report, DBS bank noted that initially, GST will lead to the rise in inflation rate which will remain for a year but after that GST will affect positively on the economy.

As we know Real Estate also plays an important role in Indian economy but some expert thinks that GST will impact the Real Estate business negatively as it will add up the additional 8 to 10 percent to the cost and reduce the demand about 12 percent.

GST is applied in the form of IGST, CGST AND SGST on the Center and State Government, but some economists say that there is nothing new in the form of GST although these are the new names of Central Excise, VAT, CST and Service Tax etc.

As every coin has two faces in the same way we tried here to familiarize the things related to GST with both perspective i.e. positively and negatively in this article. Despite having some factor which is being expected to affect the Economy adversely there are so many other things which are expected with a positive impact on GDP.