GST Reforms: A Panacea for India's Economic Challenges
GST reforms are expected to buffer India against US tariffs, potentially boosting GDP growth by 0.2-0.3%. By restructuring the GST tax slabs and domestic demand substitution, India aims to mitigate the adverse effects of the US's high tariffs on Indian exports, bolstering overall economic sentiment.
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- India
India's Chief Economic Adviser, V Anantha Nageswaran, has indicated that recent GST reforms will help alleviate some of the challenges posed by the United States' high tariffs on Indian shipments. He anticipates a 0.2-0.3% boost in GDP growth for the current financial year, primarily due to these reforms.
The GST Council has revamped the tax structure, moving from a four-slab system to a simplified two-slab regime. This change is expected to foster domestic demand to counterbalance any export demand shortfalls from the US. Products such as soaps, shampoos, and cars will witness a price drop following these changes.
In addition, Nageswaran emphasized the importance of letting the agriculture sector thrive by allowing farmers the flexibility to sell freely. On the global trade front, India is not engaging in initiatives for alternate currencies to the dollar, although the recent BRICS Summit discussed the potential use of local currencies.
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