Adoption of GST tax will boost India's medium-term growth: IMF

October 8, 2016

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.
IMF’s findings

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

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