The Union Finance Minister Nirmala Sitharaman tabled the Economic Survey 2023-24 in Parliament on Saturday, ahead of the presentation of Union Budget 2024-25, which highlighted major developments in India’s tax compliance and logistics efficiencies.
The Economic Survey Report boasted an increase in the collection of indirect taxes in FY24, with Goods and Services Tax growing by 12.7%.
It said, “The increase in indirect taxes in FY24 was mainly driven by a 12.7 percent growth in GST collection. GST E-way bill generation has also registered an uptick post-pandemic. The increase has been equally pronounced for both intra-state trade and inter-state trade. The increase in GST collection and E-way bill generation reflects increased compliance over time.”
Effects of GST on Logistics
GST as part of the ‘One Nation, One Tax’ regime has been able to bring down logistics costs and smoothen the operations across the state border. Trucks are saving up to 30% on their travel time. The Ministry of Road Transport and Highways states that post-GST implementation, the distance covered by truckers increased from an average of 225 km to 300-325 km per day.
This improved supply chain has not only reduced logistics costs but also contributed to an improved ease of doing business and to the growth of the manufacturing sector.
Economic Gains and Compliance
These findings are corroborated by the National Council of Applied Economic Research ( NCAER ), which published a report in December 2023 saying the logistics cost in the economy had fallen by 0.8-0.9 percentage points of GDP between FY14 and FY22. The direct savings on the logistics cost translate immediately into increased efficiency and savings for businesses, further driving economic activity.
The Economic Survey has reiterated the increase in collections of GST and E-way bill generation clearly showcasing the trend of better tax compliance over time. The revival in economic activity post-pandemic is evidenced by an increase in intra- and inter-state trade activities that reflect a robust and compliant tax regime.
The Economic Survey for 2023-2024 brings out how well the economic landscape of India has transformed through the gigantic impact of the GST on tax compliance and logistic efficiency. In this regard, the findings can be a very good stepping stone towards more and better economic reforms and growth under the upcoming Union Budget 2024-25.
As the country moves ahead, its increase in GST collections and E-way bill generation only reiterates government efforts in providing a transparent, efficient, and compliant tax system—one that could redound to the benefit of businesses and the economy in general.
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