Against the backdrop of sluggish consumer expenditure, Goods and services tax(GST) revenues for the first nine months of the year 2023-24 revealed a dissonance in consumption growth across various states.
States such Gujarat, West Bengal and Andhra Pradesh accompanied with other 12 states, witnessed a weaker growth. The other 10 states, have grown at rates lower than the national average of 15.2%. Whereas states such as Madhya Pradesh, Maharashtra, Karnataka, Haryana, Uttar Pradesh, Tamil Nadu and Telangana have seen state GST revenues rise in the range of 17%-18.8%.
On 5th Jan,2023 The National statistical office, projected the private final consumption expenditure(PFCE) to grow a mere 4.4% this year, which is estimated to be the slowest since 2002-03. Additionally, Post recovery of 6% in the April-June 2023 quarter from below 3% in the second-half of the preceding year, the PFCE bar slipped to 3.1% in the July-september quarter.
The bank's researchers headed by the chief economist, Madan Sabnavis, asserted that "Quite clearly, an improvement in consumption across some of the states that are lagging today will help boost both GDP growth and GST collections"
Indian ratings and research economists highlighted a notable absence of substantial wage growth. Lower-income households experienced a marginal decline, contrasting with a 6.4% increase for their high-income counterparts in the second quarter of this year. This was thus, identified as a crucial factor influencing consumption growth.
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