Thiruvananthapuram: It looks like Kerala is on the road to economic recovery. The latest GST collection figures released by the Centre show that Kerala has clocked a higher growth in tax collection, a barometer of economic activity, during July and August than during the corresponding pre-COVID months.
The GST collection figures are also proof that the second wave, though catastrophic in terms of health, was mild on the economy. The GST collections in Kerala in August 2019, before COVID struck, was Rs 1582 crore. This August it is Rs 1612 crore, a nearly two per cent growth than pre-pandemic levels.
Similar is the case of July. In 2019 July, before the pandemic and also before the second big flood, the GST collection was Rs 1512 crore. This July, in the middle of the second COVID wave, it was Rs 1675 crore, a growth of 10.78 per cent.
Nonetheless, the revival in comparison to the first COVID year (2020) is far more dramatic. Take July for instance. July 2020 saw GST collections of Rs 1318 crore. This was a time when the lockdown was in full swing. This July, collections shot up to Rs 1675 crore, a 27 per cent growth. It got better in August this year. In August 2020, the GST collection was Rs 1229 crore. This August it is Rs 1612 crore, a 31 per cent growth.
Finance minister K N Balagopal, however, sounded guarded. "We are still not sure whether it is a temporary spike. But if this growth sustains, we will soar beyond pre-COVID levels," Balagopal said. He seemed to suggest that the growth reflected business vigour during Onam. Fact is, increased growth is evident during July, too, a period when the Onam market is yet to come alive.
This revival in growth can also be chalked up to certain direct transfers the LDF government had put in place this fiscal. The last LDF government, and the new ministry, had announced stimulus packages of Rs 20,000 crore each, one in January and the other in June. A good part of this was direct transfer: social security pensions (Rs 748 crore), pensions through welfare boards (Rs 1200 crore), payment to contractors (Rs 1700 crore), food kits (Rs 1740 crore), interest subsidy through Kudumbashree (Rs 193 crore).
Money in the hands of people seems to have had a beneficial impact on spending, buoying up the state's tax revenue.
