PM Modi and Trump
As soon as the US announced a huge tax on Indian goods, the Modi government immediately swung into action. On August 15, Prime Minister Narendra Modi in his speech from the Red Fort announced the deduction in GST and Services Tax. This step will give relief to the general public from being cheap, it will be easy for businessmen to do business. Interestingly, many officers of the government were also surprised by this decision. The conversation on GST reforms was going on for a long time, but no one had expected such a big announcement so soon. Even some state governments were not informed about this in advance.
Tax also reduced, law also easy
The Modi government is now preparing for major changes. The tax on goods and services will now be reduced before and tax rules are also being easier. The government believes that this will save more money in people’s pockets and increase shopping in the market. PM Modi also said that old and useless laws will be removed, so that businessmen can work easily. It is not easy to do business in India today. Many types of paper, permits and government approval are required. Due to this, big projects get stuck and foreign investors also get into thinking.
Team of new officers has been made
The government has formed two big committees which are working on the rules easier and the next round reforms in different states of the country. A committee is being led by Cabinet Secretary TV Somathan, who will work on changes at the state level. The second committee will be formed under the leadership of Rajiv Gauba of NITI Aayog, which will suggest on big policies. Apart from this, the government is also thinking that companies whose goods used to buy more goods – like clothes, shoes and jewelry – should be given some relief. For this, steps such as loans at cheap interest or helping to sell goods in new markets are being considered.
GST system will be more straight now
The government wants to convert the existing four tax slabs of GST into two. Currently 5%, 12%, 18% and 28% rates are applicable. According to the new proposal, now there will be only two rates – 5% and 18%, and only 5% tax will be levied on essential goods. Along with this, the central government has proposed to impose 40% GST on extremely luxurious items and ‘Sin Goods’ (such as alcohol, cigarette, luxury cars etc.). IDFC First Bank believes that this deduction in tax can increase the country’s economic growth by about 0.6% in the next one year. With this, everyday things like food items and clothes will be cheaper and people will shop more.
The economic condition of the country is also fantastic
The economic condition of the country is currently being considered good. Inflation is very low, the condition of banks is strong and the international agency S&P has also described India’s credibility as better. Sanjeev Sanyal, a member of the Prime Minister’s Economic Advisory Committee, says that now India has a good opportunity to implement the reforms that have been deferred for a long time. Sonal Verma, economist of Nomura Financial Company, says that these reforms show that India is not only responding to America’s tax, but is telling the world that doing business here is now becoming easier now.