GST may come to India


The Budget proposals were an exercise in a balanced approach to all the major macroeconomic issues, especially growth. One would say that the proposals will lead to containing inflation, an acceptable level of fiscal deficit and a 9%-plus rate of GDP growth.

There was a strong indication from the finance minister that we should expect the introduction of GST during the next financial year. The decision to introduce the constitutional amendment for GST was backed up by the important decision not to raise excise duty, which is currently at 10%, the likely rate of central GST. Once GST is introduced, it will lead to much lower rates of inflation as the indirect taxation on consumer products will come down by about 5 percentage points. The fiscal deficit would also come down as excise duty evasion would come...