GST ship is battle ready for the choppy Indian economy
GST bill nuances have been finally etched and July 1 marks a new chapter in India's economy. FinMin said, "Most work in relation to rollout is now complete... only a few things remain" and since we are on the final leg of the journey, it's time to reflect on the task at hand. Here are some salient takeaways of GST and its future prospects.
The golden anti-profiteering clause
The presence of anti-profiteering clause makes GST worthwhile. If that clause wasn't present, chances are that firms would have lapped up the tax reduction in their profits instead of passing it on to the consumers. The NDA government is now trying to expedite anti-profiteering mechanism to bring firms under scrutiny to see if they hike prices at an opportune time to dodge the same.
Slab change for an ailing sector would be appreciated
Chalking up Telcos in 18% bracket doesn't make any sense, as this is going to hurt the consumers. This segment has seen rapid growth and is also one of the elements that is making "Digital India" possible, even in the remote rural areas. Cellular Operators Association of India (COAI) has already served a petition citing the same and the government should mull on it.
The benefit that sets the mood
Revenue secretary Hasmukh Adhia said "The biggest take away from the decision is that food items will become cheaper." This is true and it was much needed. Indian economy has always been gambling with the monsoons and the consumers have been bearing the brunt of it. GST will lower prices and drive consumption in the economy and that is appreciated.
Successful in maintaining a balance
The Modi government has shown where its priorities are by taking education and healthcare out of GST equation; India which suffers from problems in both these sectors couldn't afford such a liability and the public transportation exemption should also be lauded. Walking on a fine line, the government solved "eating out" hiccups via slabs, which safeguard middle-class, and is bullish on the affluent.
Hope the projections are true
Revenue secretary believes and was quoted saying that "our internal estimate is that after the rates are decided, inflation should come down by 2%." Prior to settling down, every transition goes through hiccups and this will not be any different; what the center needs to ensure is that the consumers are fully aware of the changes to reap optimum benefits from it.
The final call and it's good to go
Six items are currently on the hold and the government needs to reach a decision soon to have everything ready by July 1. Adhia said, "We decided to keep the things on which a lot of people have a lot of things to say..The main achievement now is we have been able to inform people about the tax rates of many commodities except six."
