GST Will Create A Common Indian Market, Improve Tax Compliance: Economic Survey
As per the Economic Survey 2016-17 presented in Parliament on Tuesday, the Constitutional Amendment, paving the way for implementing the transformational Goods and Services Tax (GST), will create a common Indian market, improve tax compliance and governance, and boost investment and growth.
The Report also states that demonetisation has had short-term costs but holds the potential for long-term benefits. Follow-up actions to minimize the costs and maximize the benefits include: fast, demand-driven, remonetisation; further tax reforms, including bringing land and real estate into the GST, reducing tax rates and stamp duties; and acting to allay anxieties about over-zealous tax administration. These actions would allow growth to return to trend in 2017-18, possibly making it the fastest-growing major economy in the world, following a temporary dip in 2016-17.
The Survey also states that the year also saw a number of legislative accomplishments in the country.
In addition to the GST, the Government:
- Overhauled the bankruptcy laws so that the “exit” problem that pervades the Indian economy--with deleterious consequences highlighted in last year’s Survey--can be addressed effectively and expeditiously;
- Codified the institutional arrangements on monetary policy with the Reserve Bank of India (RBI), to consolidate the gains from macroeconomic stability by ensuring that inflation control will be less susceptible to the whims of individuals and the caprice of governments; and
- Solidified the legal basis for Aadhaar, to realise the long-term gains from the JAM trifecta (Jan Dhan-Aadhaar-Mobile).
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