The Minister of State for Finance, Pankaj Chaudhary, explained that the growth of private final consumption expenditure (PFCE) in Q2 FY24 was estimated at 3.1%, the lowest in the past 12 years except for Q2 FY21 during the pandemic.
The National Statistical Office (NSO) has projected PFCE to grow only 4.4% in FY24, the lowest since FY03. This is attributed to tepid rural demand and muted growth in real rural wages.
The agriculture and allied sector is expected to grow at 1.8% in the current fiscal year, the lowest in eight years, while the service sector’s growth is forecasted to decrease to 7.7% from 9.4% in FY23.
However, the manufacturing sector is expected to grow at 6.5% in FY24 compared to 1.3% in FY23.
Regarding GST mop-up, Chaudhary noted that while GST data may generally reflect consumption trends, it may not provide a complete picture as some goods and services are exempt from GST.
In the first 10 months of FY24, GST growth averaged 12%. Chaudhary also mentioned that the buoyancy of State Goods and Services Tax (SGST) revenue was higher in FY19-FY23 compared to FY13-FY17.
Overall, the states and the Centre recorded a buoyancy of 1.25 in FY19-FY23, higher than the 1.0 in the pre-GST period.
Finance Minister Nirmala Sitharaman has previously highlighted the benefits of GST, including the reduction of compliance burdens and the widening of the tax base.
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