It is good to note that the country’s Goods and Services Tax (GST) collection is back on the growth track, first time since March. The gradual normalisation of economic activities and moving out of the lockdown restrictions and changing the definition of containment zones from curbs on a whole locality or a housing complex to only a particular house where Covid-19 is reported are mainly responsible for the economic recovery. This helped improve the government’s consumption tax collection. The GST revenue showed a four percent growth at Rs.95,480 crore in September, a 10 percent improvement over the preceding month. The indirect tax collection plunged 72 percent to Rs.32,172 crore in April, the lowest since GST was launched in July, 2017. The GST collection contracted for six months in a row. The 68-day lockdown since March 25 reflected in the May collection with 38 percent annual fall (Rs 62,151 crore). The fall in revenue, however, slowed to nine percent in June (Rs 90,917 crore) mainly on receipts for the lockdown period. Subsequently, the annualised revenue collections fell 14.3 percent in July (Rs 87,422 crore) and 13 percent in August (Rs 86,449 crore).
However, the fast-forward movement of business activities should not be mistaken as the successful result of the government’s Covid control measures across the country. Unfortunately, the reverse is true. Covid cases are on the rise. No matter if they are reported or not. A large section of the people — educated or uneducated, rich or poor — with common Covid symptoms such as fever, cough, frequent sneezing, body ache, breathing trouble or lung congestion, are afraid to go for Covid tests, fearing they may be treated like castaways and subjected to social stigma if found ‘positive.’ In their effort to stay fit, they often use commonly prescribed drugs and nasal decongestant sprays, the demand for which has skyrocketed in recent months.
Gradual expansion of business activities may be linked with record rise in reported Covid cases and deaths. This is certainly a matter of serious concern. Covid has badly impacted the economic growth, income of the central and state governments and individuals. A large section in the government favours business coexistence with Covid and strongly feels that life must move on. Students of economics often quote J.P. Morgan that “the first step towards getting somewhere is to decide that you are not going to stay where you are.” However, it could be foolish to rush with steps to normalise business activities, ignoring the continuing spread of the pandemic in the absence of proven medicines or vaccines.
Officially, India reported 86,821 new Covid-19 cases in September, making it the worse month of the pandemic in the country. The last month recorded the maximum number of deaths due to Covid-19 since the start of the pandemic in the country. Out of a total of 98,628 fatalities, as many as 33,255 were reported in September alone. This accounted for 33.7 percent of the total casualties. The country’s Covid-19 tally crossed 63-lakh mark till September-end. They included 9,40,705 active cases, 52,73,202 cured/discharged/migrated and 98,628 death, said the Ministry of Health and Family Welfare on October 1. The tally is growing by day. The total number of cases already topped the 70-lakh mark by October 11. Interestingly, several European countries, including the UK, Spain, Italy, France and Germany are witnessing an aggressive second wave of coronavirus infections. And, those governments are now in the process of reintroducing restrictions, including earlier-eased lockdowns. Lately, Britain announced tighter restrictions preventing residents in Covid-hit areas from socialising with people outside their households and support bubbles. The new restrictions affected residents of Northumberland, North Tyneside, South Tyneside, Newcastle-upon-Tyne, Gateshead, Sunderland and County Durham. With schools beginning to reopen after months of closure, the Spanish government has made it mandatory for all children over the age of six to wear masks in class and in most public places. However, just as the school year began, the country witnessed a sharp rise in Covid-19 cases. Madrid has quickly become the centre of the country’s coronavirus outbreak.
It would appear that India, a developing country with massive population and limited job opportunities, is clearly confused. The violent spread of coronavirus over the recent months would probably call for stricter restrictions on social gathering, public movement and business activities. In reality, this is unlikely to happen. The society and administration are simply not financially capable enough to feed themselves for long with income levels precariously down. Traditionally, October marks the beginning of India’s six-month-long busy economic season. This is also the period when the country’s major agri-based industries such as sugar, cotton textiles, jute products look forward to perform their best. India, the world’s largest sugar consumer, is also the second biggest sugar producer after Brazil. India is also the world’s largest cotton and jute producer.
The country is the second largest potato grower, after China. It marks India’s biggest harvesting season. Several major festivals fall during this period. Household spending reaches its peak during this time. Both the central and state governments are under heavy pressure for financial recovery to serve the administration and the people. The April-September lean economic season has already taken a heavy toll on the country’s economic growth and individual earnings. If the peak season fails to achieve somewhat near normalcy in agriculture and industrial production and consumption, the latest World Bank and RBI predictions of a possible 9.6 percent contraction of India’s GDP, this year, may prove to be an understatement. The government seems to have little choice but to live with the spectre of high Covid cases while trying to normalise the economy and social sector. It is a tightrope walk. It will require a strong leap of faith for the government and the society that obstacles will not overtake the wisdom. (IPA Service)