If September quarter results posted by large retailers and many banks mirrored a moderate but steady pick-up in consumption demand after the second wave of the pandemic, festive fervour seems to be solidifying the revival. Thanks to brisk trade and commerce ahead of Diwali, daily e-way bill generation for goods transportation under the Goods and Services Tax (GST) system came in at 24.86 lakh for the week ended October 24, 17.6% higher than the corresponding number for the previous week.
E-way bill is mandatory for inter-state movement of goods of consignment value exceeding Rs 50,000 in motorised conveyance. The daily average of e-way bills for the first 24 days of October was 22.68 lakh, 3.8% higher than the same for the first 26 days of September. Between October 1 and 24, as many as 5.44 crore e-way bills were generated.
Going by the recent weekly trends, e-way bill numbers are expected to rise further in the short run and the data for the whole of October could be more robust, analysts reckon.
“Festive dispatches by month-end will be very high,” All India Transporters Welfare Association (AITWA) joint secretary Abhishek Gupta told FE.
Even though the rise in the number of e-way bills is a good sign, some analysts have sounded caution. “It remains to be seen if all this (the rise) is because of pre-festive/festive season in which wholesalers and retailers stock up goods. If demand in festive season is good and shopkeepers are able to sell out most of it, then there will be second round of demand,”said India Ratings chief economist DK Pant. If the trend is sustained post-Diwali, it will give a clear indication that economic revival has taken stronger roots, Pant added.
E-way bill generation by businesses rose to 6.79 crore in September from 6.59 crore in August and from 6.42 crore in July. It was 7.12 crore for March, before the second wave of Covid-19 hit economic activities. In recent weeks, the number of transactions rose in a steady manner, except during the week ended October 17, which saw holidays due to Dussehra.
Higher e-way bills generation is reflected in higher GST revenues. GST collections came in at `1.17 lakh crore in September (largely August transactions), up 23% on-year and 4.5% on-month, signalling a sustained pick-up in trade and commerce.
Robust tax collection in recent months lent credence to the notion that the expansion of the formal sector of the economy, which got a leg-up from demonetisation and the GST roll-out, gathered steam with the Covid-19 outbreak.