In the long-term, GST would be simplified even more. Globally, countries that have benefitted from GST implementation typically deploy two- or three- rates, as compared to the five-rate structure in India. As the cascading effect disappears, inflation will reduce, thus leading to a positive consumer outlook. As the tax revenue rises, the fiscal deficit would improve.
The international business community has welcomed this changing landscape of Indian business, and noted that the GST has helped improve the ease of doing business in India. This is expected to attract more FDI investments and help growth in exports.
Upcoming initiatives need to focus on capacity-building and digital adoption
As immediate next steps, the government needs to address capacity-building and digital adoption among the SMEs and MSMEs in India. The overall compliance cost needs to be lowered and technology is a great enabler here. Shifting a pen-and-paper economy like India to a completely digital platform is a good start. However, there has to be considerable investment both from the government as well as the industry in this direction. Counseling services and hand-holding guidance to file returns will be important.
In hindsight, the GST has been a step in to the right direction. It will have a long-term impact on the country’s GDP growth, ease of doing business, expansion of trade and industry, and the ‘Make in India’ initiative. Most importantly, it will be significant in establishing and promoting honest business practices, which will propel India towards becoming a significant economic power.
2 thoughts on “Future of GST in INDIA”