The International Monetary Fund (IMF) has asserted that adoption of GST (Goods and Services) tax will boost India’s medium-term growth.
It was mentioned IMF’s latest Asia Pacific regional economic update. It mentioned that India has shown progress on reforms that could boost business investment and growth.
- Greater labour market flexibility and product market competition in India remain essential to create jobs and raise growth.
- Priorities also include effective implementation of the new corporate debt restructuring mechanisms.
- India has shown progress on reforms that could initiate business investment, including already strong FDI inflows, which will further increase domestic demand.
- Over the medium term, a number of Asian economies stand to benefit from a demographic dividend.
- In some Asian economies like India and Indonesia the working-age population continues to grow, potentially helping sustain strong potential growth.
- India’s growth continues to benefit from large improvement in terms of trade, positive policy actions, including implementation of key structural reforms, enhancement in confidence and gradual reduction of supply-side constraints.
What is GST?
- GST is uniform single indirect tax regime throughout the country that has subsumed central and state indirect taxes into single indirect tax.
- It aims to remove indirect tax barriers across states and integrate the country into a single common market, boosting government revenue and reducing business costs.
- The Constitution (One Hundred and First Amendment) Act, 2016 gives the constitutional status to GST.
For more information: Benefits of GST Regime