Optimistic Signs for the Economy as GST, UPI Hit Record Growth

GST collection for the month of March in 2023, grew by 13% compared to the same month last year. This has been the second-highest mop-up since the regulations were implemented, while the return filing for during March 2023 has been the highest so far. According to the government, income from imports was 8% higher and revenue from domestic transactions was 14% higher than in the corresponding month a year ago.

Unprecedented GST Collections

GST income for March 2023 was ₹1,60,122 crore, with Central GST accounting for 29,546 crore and state GST stood at ₹37,314 crore. The finance ministry also said in the statement that the integrated GST collection was ₹82,907 crore, which included ₹42,503 crore from imports of commodities and cess of ₹10,355 crore.

The overall gross revenue for the entire fiscal year 2022-23 is  ₹18.10 lakh crore, a 22% increase over the previous year. For the entire year, the average gross monthly collection is Rs 1.51 lakh crore.

For the fourth time in the previous fiscal year, gross GST collection has surpassed Rs 1.5 lakh crore, posting the second-highest March collection since the introduction of GST.

income from imports of goods was 8% higher during the month, while income from domestic transactions which includes imports of services was comparatively 14% higher than the same month the previous year.

The number of returns filed in March 2023 was the most ever. In February, 93.2% of invoices and 91.4% of returns were filed, compared to 83.1% and 84.7%, respectively, a year before.

Digital Payments at a Record High in April

In the context of value, UPI transactions increased 43% year on year (YoY) in April to a record ₹14.1 trillion. UPI volume surged 59% year on year to a record high of 8.9 billion transactions. In March, the platform achieved ₹14.05 trillion worth of transactions, with a total volume of 8.7 billion, whereas in February, the platform processed 7.5 billion transactions totalling ₹12.4 trillion. 

According to NPCI data, roughly 1 billion transactions worth around ₹1.37 trillion occurred only in the last three days of April. The explanation for this is discretionary and scheduled spending, as April finished on a weekend when spending is often greater. 

The surge in UPI transactions has been assisted by the expansion of digital financing, in which lenders choose to issue loans via the UPI network. In April, IMPS transactions also increased 5% year on year to 486 million. In terms of value, it increased 17% year on year to ₹5.2 trillion.

Optimistic figures, say experts

According to experts, when consumers begin making debit payments, it is tied to two components. The first component is cash on hand; the second represents expected spending and transactions.

The optimistic figures emerge at a time when most international agencies have downgraded India's FY24 GDP forecast. Recently, the finance ministry also noted downside risks to the 6.5% growth rate anticipated previously, citing international challenges, resulting in export decline, OPEC+ output contraction, and El Nino predictions.. 

According to a recent RBI assessment, the most current data arrivals imply that the IMF and other world organisations may meet forecasting errors.