INSUBCONTINENT EXCLUSIVE:
Proactive fiscal policy and improved GST collections can spur growth, SBI's report saysDeclining second wave of Coronavirus pandemic and
improved Goods and Services Tax (GST) collections can enable the Centre to compensate the states, a report by the State Bank of India (SBI)
activity only picks up modestly, we believe the space for monetary accommodation is over and only a proactive fiscal policy can rekindle
daily new cases and the gap between the two is much higher than what was observed during the first wave peak, the report prepared by the
country's biggest lender said.The other reason to cheer is the GST revenues which have set a new record at Rs 1.41 lakh crore in April
2021 and Rs 1.03 lakh crore in May 2021
The monthly average cess collection was Rs 9,355 crore
Thus, if we combine all these figures, the average monthly revenue for states would be Rs 68,912 crore for this year," SBI said in its
report."If we calculate the yearly figure on this number, then the overall revenue would be Rs 8.27 lakh crore
We collected the data for almost all states and found that the combined budgeted SGST and cess estimates were Rs 7.67 lakh crore," it
underlined.Therefore the SBI report noted that if the positive trend in GST continues then providing states their due might not be a
significant challenge for the Centre
Only a third wave could now force the Centre to borrow on a larger scale to compensate the states, it said.The SBI further stated that the
extension of Pradhan Mantri Garib Kalyan Anna Yojana from July till the end of November 2021 is expected to cost Rs 91,000 crore, while
number could go up if India enters into vaccine purchase agreements with foreign companies
However, if it continues to levy the same taxes as of now based on our assumptions of petrol and diesel consumption, the excise revenue
collections have continued to maintain pace because of persistent Government efforts in plugging the loopholes and Government had already
factored in some of the vaccination cost
