States ease Covid curbs enabling commercial recovery
As more States unlock Covid restrictions, the E-way Bills generation has also seen a sharp increase. It registered a significant rise during first 20 days of June — over 34 per cent in number and over 20 per cent terms of value.
Though E-way Bill generation started dipping in April, a sharp slump was recorded during first 20 days of May and it was basically on account of pandemic induced stringent local lockdowns in economically significant States. Moody’s Investor Services, in its report had said that only 10 States account for 75 per cent of the total confirmed Covid-19 cases in India, with Maharashtra, Karnataka and Kerala the worst affected in terms of total confirmed and active cases. Moreover, these States collectively account for 63 per cent of the pre-pandemic level of GDP, with four of them – Maharashtra, Tamil Nadu, Uttar Pradesh and Karnataka – contributing the largest shares in financial year 2019-20.
With the improvement in economic activities, States are expected to lessen stress on their finances. In a report, economic research firm, Crisil said that aggregate GST collections, which account for a fifth of the revenues of States, recovered well in the fourth quarter of last fiscal as economic activity sprung back. Further it mentioned that the momentum continues this fiscal, with April and May collections averaging ₹0.93-lakh crore, marking an 11 per cent growth over fiscal 2020.
“While the second wave of the pandemic may moderate GST collections in June-July, we expect a recovery to pre-pandemic levels by August,” Manish Gupta, Senior Director with CRISIL Ratings said while adding that CRISIL expects India’s GDP to grow 9.5 this fiscal which should assist GST collections to marginally better the pre-pandemic levels.