Congress Vindicated as Modi Promises GST Reform

In a significant political development, Prime Minister Narendra Modi has pledged to simplify the Goods and Services Tax (GST) framework, a move that the Congress party sees as validation of their earlier criticism of the policy. Congress general secretary Jairam Ramesh highlighted that the economy has struggled to recover from dual shocks of the initial GST rollout and demonetization.

The GST, initially introduced in 2017, has faced criticism for its complexity. Ramesh referenced the Vijay Kelkar Committee report as the catalyst for the GST's first iteration. However, Modi's latest reforms promise a streamlined structure aimed at benefiting both lower-income and business sectors by reducing the current four tax slabs to just two.

The government's draft reform, now under circulation among states, suggests notable changes in the tax regime, including the abolition of the 12% and 28% slabs and the introduction of a special 40% bracket for certain goods. These adjustments come after extensive deliberations, signaling a strategic shift intended to enhance economic efficiency and equity.

(With inputs from agencies.)