Amid worries about weak consumer spending trends, Goods and Services Tax (GST) revenues for the first nine months of 2023-24 reveal a dissonance in consumption growth across States, with Gujarat, West Bengal and Andhra Pradesh among a dozen-odd States that are seeing weaker growth.
Last Friday, the National Statistical Office estimated private final consumption expenditure (PFCE) would grow just 4.4% this year, the slowest since 2002-03, barring the pandemic-affected year of 2020-21. After recovering to 6% in the April to June 2023 quarter from below 3% in the second half of 2022-23, the PFCE growth had slipped to 3.1% in the July-September quarter.
While GST revenues have been robust through April to December 2023, growing at 11.7% and averaging ₹1.66 lakh crore a month, State GST collections have grown at a sharper pace of 15.2%. As GST is a consumption-based tax that can broadly signal the consumption trends in the economy, Bank of Baroda economists distilled the State-wise GST revenue inflows so far this year to assess if there are regional disparities in the consumption story.
