GST has introduced a new chapter in country’s revival towards inclusive growth. India have became a ‘ one nation one tax’ country which is a phenomenal achievement from the perspective of ‘ease of doing business’.
When any major transformation occurred it is obvious that it will be accompanied with side effects. It is also obvious that there will be some forces who try to derail the move with respect to the fear of loosing to the government. As an endorsement, we must look at the rising Sensex that clearly suggests the global investors have given a thumbs up to the GST (Goods and Services Tax) roll out and it shows that a strong beginning of new India is made. This was shared by Mr. Rakesh K. Shukla, A Seasoned Entrepreneur and public policy analyst in a conversation with Faiz Askari of SMEStreet. Mr Shukla expressed his opinion on the positive impact on Indian economy by GST implementation.
According to you, what impact would the implementation of GST is going to make on the Indian economy?
PM Narendra Modi’s bold initiative to integrate the Indian economy with the global economy by introducing GST is definitely a strong move into the direction of a positive change. The GST implementation is set to thrive the much needed economic boost to the country. Infact, GST has introduced a new chapter in country’s revival towards inclusive growth. India have became a ‘ one nation one tax’ country which is a phenomenal achievement from the perspective of ‘ease of doing business’.
This strategic bold step will not just streamline our country’s financial backbone, but it will also increase the confidence of investors in India. Hence, I personally feel that GST is not just a financial or economic reform for India but it will prove to be a social reform for a country like India.
Please explain your understanding on GST with regards to ensuring Ease of Doing Business?
Obviously, ‘One nation on tax’ is a significant appeal to do business with an ease of documentation. Similarly, GST would be easier to carry goods from one state to another and this would prove to be a blessing for the logistics sector. This was a deliberate step which was implemented after deep consultation.
It was not an easy decision to make. Because it reduces complexity in the system and it also reduces the level of confusion regarding taxation structure. This step presents the image of the Prime Minister as a bold and passionate leader who has shown a vision for India in the last three years and has implemented important rules and regulations.
You mentioned about GST as a social reform. Please explain this opinion of yours for our entrepreneur readers?
When life of an entrepreneur is becoming easy and when we can become a favorite destination for investors, it is a obvious that more employment would also be generated. So, GST ensure creation of more jobs, which will ultimately influence the life of masses in India. This will also encourage entrepreneurs by making the businesses more competitive. This will be a great boost for the common Indian consumers.
Notwithstanding, despite political differences, it is also an important step to ensure better relations between the Center and the state in relation to economic policies. It sends a message to the world that from Kanyakumari and Jammu and Kashmir to Arunachal to Andhra Pradesh, India is a nation and a tax. It confirms the agenda of the government’s reforms and like the bold initiative of the Prime Minister’s emancipation, it will help prevent corruption. Most importantly, GST also reaffirms the government’s reforms agenda and PM Modi’s bold demonetization initiative, it will help in curbing corruption. Overall, looking at the immediate impact analysis of GST, we can say with confidence that it is a social reform for India.
What is your observation on the present day confusion related to GST implantation?
It is natural to have hesitation on embarking on any bold step towards a revolutionary path. Because we must not forget that opponents are trying their best to make sure that such progressive are not successful, but the way Sensex has responded post GST clearly indicates that global investors have supported this move. The new India is welcoming it with open hands.
In addition to this, Dr Shukla also highlighted ten key points which signifies the importance of GST for India.
- Ends several indirect taxes for unified tax structure on all goods and services.
- Simplifies tax revenue distribution between Centre and State. For example: 18 per cent = 9 per cent CGST and 9 per cent SGST
- Removes internal tariff barriers to promote domestic trade and business
- End to tax disparities between states with one set tax rate
- Transparency for consumers on taxes paid on goods and services
- Both federal and state govts can tax entire value chain of production of goods and supply of services
- Tax revenue will increase as informal economy joins formal economy. This will increase spending capacity of federal and state govts and accelerate GDP growth rate
- GST is expected to promote the manufacturing sector, thus boosting exports by making production more competitive and creating more jobs in the economy
- Ease of doing business could improve as corporations will only need to pay one tax in place of several multilayered taxes
- Tax exemptions will also be reduced as the GST system is improved in the years to come, thus increasing govt’s tax base from goods and services.