Lok Sabha Question No. 314 (UNSTARRED), answered on 2024-02-05
Subject: Dissonance in Consumption Growth
Ministry: FINANCE
Asked by: Vellalath Kochukrishnan Nair. Sreekandan, Manne Srinivas Reddy

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE

## LOK SABHA UNSTARRED QUESTION NO. 314

TO BE ANSWERED ON MONDAY, FEBRUARY 05, 2024 / MAGHA 16, 1945 (Saka)

## Dissonance in Consumption Growth

314. SHRI V.K. SREEKANDAN: SHRI MANNE SRINIVAS REDDY:

Will the Minister of FINANCE be pleased to state:

- (a) whether the Goods and Services Tax (GST) revenues for the first nine months of 2023-24 revealed a dissonance in consumption growth across a dozen-odd States with Andhra Pradesh, Gujarat  and  West  Bengal  that  are  seeing  weaker  growth,  if  so,  the  details  thereof  and  the reasons therefor;
- (b) whether it is also true that the private final consumption expenditure would grow just 4.4% this  year  which  would  be  the  slowest  since  2002-03,  barring  the  pandemic-affected  year  of 2020-21, if so, the details thereof and the reasons therefor;
- (c) whether the PFCE growth had slipped in various quarters and if so, the comparative detail thereof since inception of GST, State-wise along with the reasons therefor;
- (d)  whether the private  final consumption expenditure growth had slipped to 3.1% in the July September quarter of 2023-24 and if so, the reasons therefor; and
- (e) whether the GST is a consumption based tax that can broadly signal the consumption trends in economy and if so, the details thereof?

## ANSWER

## THE MINISTER OF STATE IN MINISTRY OF FINANCE (SHRI PANKAJ CHAUDHARY)

- (a): The details of State GST revenue for the period of nine months of FY 2023-24 are given as per  Annexure  1.  Growth  in  GST  revenue  is  broad  based  with overall  national  average being 12%. Consumption growth, state wise, is not compiled and hence it is not possible to comment if there is any dissonance in growth in consumption vis-à-vis GST revenue.
- (b):  As  per  first  advance  estimate  of  MoSPI,  PFCE  in  FY  2023-24  is  estimated  to  be Rs.97,74,122 crore,  which is a growth of 4.4%  over previous year. This is  only first advance estimate.  Moreover,  this  growth  needs  to  be  seen  in  the  light  of  higher  consumption  growth rates in the earlier 2 years of 11.2% for FY 2021-22 and 7.5% for FY 2022-23.
- (c): Quarterly PFCE is not compiled for states. However, quarter wise PFCE Levels and Growth rates since inception of GST are as per Annexure 2.

(d): Yes, PFCE growth had been estimated to 3.1% in July-September Quarter of FY 2023-24 at constant  prices.  Significant  growth  or  contraction  in  components  of  PFCE  having  reasonable shares,  particularly  Food  articles,  has  resulted  in  overall  growth  of  3.1%  in  PFCE. Subdued growth  in  Agriculture  and  Allied  sector  as  well  as  moderate  growth  in  services  sector  have lowered the overall PFCE growth rate. In addition, it is relevant to state that in Q2 of earlier two financial years, consumption growth rates were higher and therefore there is a base effect as well.

(e): The Goods and Services Tax (GST) is a consumption tax that consolidates various indirect taxes into a single tax structure, streamlining the taxation process. Being an indirect tax, GST is collected from suppliers of goods and services at every stage of value addition and not from the ultimate consumers of goods and services. While GST data may broadly reflect consumption trends, it may not provide total picture of consumption as there are a large number of goods and services  which  are  either  GST  exempt  or  are  outside  GST.  Moreover,  direct  imports  by consumers are also not reflected in GST.

| S. No.   | State/UT                    | Post Settlement SGST April-December (Rs. In Crores)   | Post Settlement SGST April-December (Rs. In Crores)   | Post Settlement SGST April-December (Rs. In Crores)   |
|----------|-----------------------------|-------------------------------------------------------|-------------------------------------------------------|-------------------------------------------------------|
| S. No.   | State/UT                    | 2022-23                                               | 2023-24                                               | Growth                                                |
| 1        | Lakshadweep                 | 22                                                    | 72                                                    | 222%                                                  |
| 2        | Odisha                      | 14,046                                                | 18,093                                                | 29%                                                   |
| 3        | Ladakh                      | 420                                                   | 523                                                   | 25%                                                   |
| 4        | Arunachal Pradesh           | 1,176                                                 | 1,418                                                 | 21%                                                   |
| 5        | Chhattisgarh                | 8,370                                                 | 9,937                                                 | 19%                                                   |
| 6        | Sikkim                      | 623                                                   | 738                                                   | 18%                                                   |
| 7        | Puducherry                  | 876                                                   | 1,037                                                 | 18%                                                   |
| 8        | Assam                       | 9,280                                                 | 10,727                                                | 16%                                                   |
| 9        | Madhya Pradesh              | 20,834                                                | 24,026                                                | 15%                                                   |
| 10       | Meghalaya                   | 1,087                                                 | 1,244                                                 | 14%                                                   |
| 11       | Punjab                      | 14,371                                                | 16,382                                                | 14%                                                   |
| 12       | Mizoram                     | 623                                                   | 707                                                   | 14%                                                   |
| 13       | Maharashtra                 | 95,981                                                | 1,08,887                                              | 13%                                                   |
| 14       | Goa                         | 2,606                                                 | 2,951                                                 | 13%                                                   |
| 15       | Karnataka                   | 48,642                                                | 54,881                                                | 13%                                                   |
| 16       | Uttar Pradesh               | 49,384                                                | 55,656                                                | 13%                                                   |
| 17       | Haryana                     | 23,134                                                | 25,733                                                | 11%                                                   |
| 19       | Rajasthan                   | 25,903                                                | 28,794                                                | 11%                                                   |
| 20       | Andhra Pradesh              | 21,137                                                | 23,481                                                | 11%                                                   |
| 21       | Jharkhand                   | 8,237                                                 | 9,148                                                 | 11%                                                   |
| 22       | Tamil Nadu                  | 43,332                                                | 47,960                                                | 11%                                                   |
| 23       | Jammu and Kashmir           | 5,442                                                 | 6,021                                                 | 11%                                                   |
| 24       | Bihar                       | 17,360                                                | 19,157                                                | 10%                                                   |
| 25       | Delhi                       | 21,426                                                | 23,611                                                | 10%                                                   |
| 26       | Gujarat                     | 42,354                                                | 46,624                                                | 10%                                                   |
| 27       | Uttarakhand                 | 5,758                                                 | 6,288                                                 | 9%                                                    |
| 28       | Nagaland                    | 716                                                   | 781                                                   | 9%                                                    |
| 29       | Tripura                     | 1,074                                                 | 1,166                                                 | 9%                                                    |
| 30       | Chandigarh                  | 1,582                                                 | 1,708                                                 | 8%                                                    |
| 31       | West Bengal                 | 29,170                                                | 31,300                                                | 7%                                                    |
| 32       | Telangana                   | 27,964                                                | 29,889                                                | 7%                                                    |
| 33       | Andaman and Nicobar Islands | 365                                                   | 388                                                   | 7%                                                    |
| 34       | Kerala                      | 21,953                                                | 23,045                                                | 5%                                                    |
| 35       | Himachal Pradesh            | 4,205                                                 | 4,160                                                 | -1%                                                   |
| 36       | DN&DD                       | 889                                                   | 804                                                   | -10%                                                  |
| 37       | Manipur                     | 1,046                                                 | 813                                                   | -22%                                                  |
| 38       | Center Jurisdiction         | 0                                                     | 0                                                     |                                                       |
|          | Total                       | 5,71,807                                              | 6,39,052                                              | 12%                                                   |

Annexure 2

| PFCE Levels in Rs. Crore (at Constant Prices)                   | PFCE Levels in Rs. Crore (at Constant Prices)   | PFCE Levels in Rs. Crore (at Constant Prices)   | PFCE Levels in Rs. Crore (at Constant Prices)   | PFCE Levels in Rs. Crore (at Constant Prices)   | PFCE Q-o-Q Growth rate (at Constant Prices)   | PFCE Q-o-Q Growth rate (at Constant Prices)   | PFCE Q-o-Q Growth rate (at Constant Prices)   | PFCE Q-o-Q Growth rate (at Constant Prices)   | PFCE Q-o-Q Growth rate (at Constant Prices)   |
|-----------------------------------------------------------------|-------------------------------------------------|-------------------------------------------------|-------------------------------------------------|-------------------------------------------------|-----------------------------------------------|-----------------------------------------------|-----------------------------------------------|-----------------------------------------------|-----------------------------------------------|
|                                                                 | Q1                                              | Q2                                              | Q3                                              | Q4                                              |                                               | Q1                                            | Q2                                            | Q3                                            | Q4                                            |
| 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 | 15,17,933                                       | 15,13,130                                       | 16,33,448                                       | 17,16,907 18,01,585                             | 2015-16                                       |                                               |                                               |                                               |                                               |
|                                                                 | 16,23,633                                       | 16,58,457                                       | 18,16,561                                       |                                                 | 2016-17                                       | 7.0                                           | 9.6                                           | 11.2                                          | 4.9                                           |
|                                                                 | 17,63,225                                       | 17,38,953                                       | 18,92,042                                       | 19,36,508                                       | 2017-18                                       | 8.6                                           | 4.9                                           | 4.2                                           | 7.5                                           |
|                                                                 | 18,74,398                                       | 18,88,258                                       | 20,33,403                                       | 20,54,385                                       | 2018-19                                       | 6.3                                           | 8.6                                           | 7.5                                           | 6.1                                           |
|                                                                 | 20,08,913                                       | 20,04,358                                       | 21,55,033                                       | 20,87,914                                       | 2019-20                                       | 7.2                                           | 6.1                                           | 6.0                                           | 1.6                                           |
|                                                                 | 15,48,901                                       | 18,57,460                                       | 21,88,868                                       | 22,29,267                                       | 2020-21                                       | -22.9                                         | -7.3                                          | 1.6                                           | 6.8                                           |
|                                                                 | 18,22,102                                       | 21,21,839                                       | 24,26,098                                       | 23,33,501                                       | 2021-22                                       | 17.6                                          | 14.2                                          | 10.8                                          | 4.7                                           |
|                                                                 | 21,82,357                                       | 22,98,123                                       | 24,78,700                                       | 23,99,515                                       | 2022-23                                       | 19.8                                          | 8.3                                           | 2.2                                           | 2.8                                           |
| 2023-24                                                         | 23,12,601                                       | 23,70,094                                       |                                                 |                                                 | 2023-24                                       | 6.0                                           | 3.1                                           |                                               |                                               |

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