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The Hardy Challenge Of Tracking Economic Activity In A Pandemic

Finance

The Hardy Challenge Of Tracking Economic Activity In A Pandemic

COVID-19 is proving to be the long awaited ‘big one’: a pandemic capable of bringing societies and economies to their knees. There is an urgent need to examine how COVID-19 – as a health and development crisis – unfolded how it did, the hard challenge of tracking economic activity in a post pandemic scenario.

Tracking Economic Activity

State Govt GST Collections

What seems not to have been taken on board yet is a highly reliable monthly indicator available since April 2018 on cargo carried by road and rail, generated by the volume of e-way bills. States had every incentive to enforce e-way bills at trucking and rail points of origin since their own tax revenue was at stake. Along with that, e-way bills for GST-levied goods also got generated as a positive side effect.

Starting October 2018, the average monthly volume of e-way bills never dipped below 50 million until Q1 of 2020-21, when it dipped to 26 million. Its findings are a good pointer to a sector that can lead a spatially dispersed growth effort out of the pandemic.

Alcohol and Petroleum Collections Duty

Two important goods carried by surface transport remain within the tax domain of states: alcohol for human consumption and petroleum. States had every incentive to enforce e-way bills at trucking and rail points of origin since their own tax revenue was at stake. Along with that, e-way bills for GST-levered goods also got generated as a positive side effect.

Until this happened, central and state incentives for GST enforcement had not been aligned because the 14% revenue-growth guarantee given to states meant they did not need to bother with tax effort within their respective jurisdictions.

Small Industry Calculations

The field survey done for the economic census would have encountered resistance from small-industry respondents on two issues. One would be their source of credit. The second, which has come to the fore after the GST, is the revelation of turnover, as enterprises try to duck registration under the GST and everything it entails regarding their compliance burden.

This information difficulty can be overcome by interviewing local government officials in small towns and large villages. There are also good academic studies available, but their focus is typically limited to a sector and/or region. A study recently published by Springer and authored by Debdatta Saha, for example, covers food processing in Bihar. Its findings are a good pointer to a sector that can lead a spatially dispersed growth effort out of the pandemic.

Final Thoughts

Being able to measure the impact of the pandemic will be a major herculean task for the government. Calculating revenue through the e-way bills at state borders will be one way that states and the center can manage GST calculations. This will go a long way in enabling the governments to address the country’s data vacuum on economic activity. Based on this date, initiatives to revive the economy should be looked at. If you are looking for a detailed analysis of e-way bills and how you can go about the filing process, visit Finserv MARKETS. The platform provides a detailed analysis to get you up to speed on everything you need to know, including common e-way bill errors.

Susan M. Davis

Tv expert. Proud web nerd. Friend of animals everywhere. Hipster-friendly coffee trailblazer. Spent college summers short selling clip-on ties in Hanford, CA. Spent two years developing jack-in-the-boxes for fun and profit. At the moment I'm merchandising human growth hormone in Prescott, AZ. Spent several years implementing birdhouses for the underprivileged. Had some great experience lecturing about spit-takes worldwide. What gets me going now is building chess sets in the aftermarket.

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