GST receipts rise: what's funding India's public services

A Five-Month Peak That Hides Slower Growth

Look, October’s GST numbers look shiny at first glance. GST collections hit ₹1.96 lakh crore, up 4.6% year-on-year, a five-month high. But the glow hides a slower heartbeat underneath. The growth pace is the slowest in over 52 months. Yet the streak continues: ten straight months with receipts above ₹1.8 lakh crore. (That momentum isn’t random; it’s being propped up by steady inflows.)

Here’s the thing you should notice: net collections rose just 0.6% to ₹1.69 lakh crore, while domestic revenue stayed flat versus last year. Customs grew 2.5% to ₹37,210 crore, and refunds surged—domestic by 26.5% and customs by 55.3%. Translation? the tax system isn’t shrinking; it’s living with a quieter base and more refunds amid policy tweaks. For your day-to-day life, this could temper price pressures now, but it also signals a longer path to revenue stabilization even as consumption stays resilient.

GST Reforms: Who Really Benefits (and What It Means)

So, here’s the tipping point: India’s September 22 reform consolidated roughly 90% of goods into lower tax rates. This isn’t cosmetic. It’s a structural shift that ripples through prices, business margins, and compliance costs. The aim isn’t just a lower bite for the taxman; it’s a lever to boost demand by making everyday purchases cheaper and businesses more competitive.

Why does that matter to you? Because the reform supports a broader, healthier economy. The RBI and IMF have nudged up growth forecasts—with the RBI at around 6.8% and the IMF at 6.6%—in part thanks to the GST-friendly regime and a buffer against possible US tariffs. If that forecast holds, your job, income, and savings could benefit from steadier growth and a longer runway for earnings to catch up with valuations.

Markets on Pause: Earnings, Rates, and the Next Inflection Point

Look, India’s stock market has been described as “boring” by analysts this year. The Nifty is up about 6–7% in dollar terms, trailing the ~30% EM rally. Why? Corporate earnings have slowed, and some misses have cooled the enthusiasm. Yet there’s a hinge point: earnings are approaching a potential inflection as GST cuts, monetary easing, and income tax reductions kick in. Some reckon FY27 could see double-digit growth, and the market, while currently fair-valued, could offer roughly 15% returns in the next year if those earnings materialize.

The backdrop includes a reshaping of the Bank Nifty. SEBI’s revised rules clamp the top stocks’ weight and require a broader 14-constituent base. In December 2025, expect outflows from heavyweight banks as weights recalibrate, with Yes Bank and Indian Bank among likely additions. This isn’t just a tweak; it could tilt investor attention toward mid-size banks and away from a few giants—a move you can ride if you’re watching the credit cycle and NII trends.