Wednesday, August 03, 2016

Commentary: Nationwide GST, its pluses and likely minuses

It took the Indian legislative machinery ten years to take action on the Goods and Services Tax [GST] and enforce nationwide uniformity and the current regime can take pride in achieving this with unanimity in the Upper House of the parliament. The actual implementation will however take a while as the due process has been gone through by the Lower House after which the states will have to approve it. As a point in theory, it is commendable because it now becomes possible to think of the nation as one unified market. The full implications of the bill, its real advantages in everyday and likely pitfalls are however not clear to everyone. The business leaders have welcomed it and industry bodies claim that the bill will benefit the consumer at the end of the chain. How this move will play out on the ground is however not a simple matter. If something as prosaic as GST is causing nationwide celebration even among those who probably cannot figure out the economic implication, the reasons are political – for once the NDA government has managed to muster enough support in the Upper House to move ahead with a policy initiative. 

The present article will help an average reader see the bill in a wider perspective and also assess its likely implications in the years to come. It is almost a bullet point presentation however and each of the issues raised in it will have their own stories to tell.

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