How Can the Newly Introduced GST Revolutionize the Indian Economy?

Revolutionize the Indian Economy Using Digital Payments

The Indian government has announced a new tax system called the GST which will revolutionize the Indian economy. This tax system is designed to bring in a coordinated effort by all levels of government to move the economy towards greater efficiency and consequently improve living standards. The introduction of this tax system has been timed well because the current recession is taking its toll on the Indian economy and it needs some structural changes in order to reverse the damage caused by the recession. One such structural change is the way the tax regime works and how it interacts with other economic policies. This article will focus on one such change and that is the introduction of Goods and Services Tax (GST).

Tax System

This tax system has been designed to make things easier for the individuals in the Indian economy and this has been done by the prime minister of India. The prime minister has made it very clear that he would like to introduce a system that will help the individuals in the Indian economy to make digital payments for all their domestic and external purchases. This is a major change because it has been decades since the average person in India has been able to make digital payments for their purchases. This means that this change will revolutionize the Indian economy. Here is how this will impact the Indian economy.

Indian Economy

To understand how this will impact the economy, it is essential for us to understand how the indirect taxes work in the Indian economy. Generally, there are two kinds of indirect taxes in the Indian economy: the central tax and the state tax. For instance, the state tax is paid by the individuals as tax payments. Similarly, the central tax is paid by the common citizens of the country as monthly wages and other direct disbursements made by the government.

Budget Details

These taxes are however collected by the government from both the common citizens and the common corporate bodies of the country through the indirect taxes mentioned above. Recently the finance minister of India introduced a full budget, which was passed by the parliament but not published in the print media for a few days so people were not aware about the plans. Then a few days later the finance minister released the budget details to the press and the economic conditions in the country took a huge turn for the better.

Demonetization

When the economy of the country was flourishing with the help of the indirect taxes and the indirect disbursements made by the government, there were many businessmen who held on to some amount of cash in their accounts to be able to meet their various expenses. These businessmen were known as money lenders. The reason behind the introduction of the demonetization scheme is to bring an end to the money laundering schemes. The reason for demonetization is to bring down the circulation of cash in the country. At present, there is a very high demand for currency in the country because of the increased trade. Because of the demonetization scheme, there was a big increase in the price of the Rupee against the dollar.

Due to the impact of demonetization, the trade deficit in the country became large. This is a serious problem for the small and medium enterprises in the country. To increase the exports and reduce the imports, the small and medium enterprises have to take up training programs so that they can learn the business management of the country. They need to become familiar with the business procedures of the country. There is a great competition among the small and medium enterprises in the foreign markets, so these entrepreneurs have to do all the possible things to be successful.

The Government and Economic Growth

In fact, the government wants to bring back the economic growth of the country so that there will be more foreign tourists in the india. Therefore, the government has started different advertising programs to attract the foreign tourists. The government has been supporting the (small and medium enterprises) in the rural areas as well as urban areas by offering grants and helping them with infrastructural development. However, this policy has not been properly implemented in the urban cities. In other words, the urban regions are facing the problem of insufficient infrastructure for the development of the (small and medium enterprises). This is the reason that the (small and medium enterprises) have been complaining about the lack of job opportunities for the common people.

Digital Payments

The basic problem faced by the (small and medium enterprises) is the lack of computerization. The prime minister is trying to improve the situation by introducing the digital payments. This scheme will help the (small and medium enterprises) to make cash transactions without involving the use of credit cards or other such traditional modes of payment. If you really want to become part of the Digital Age, you should become aware of the black money involved in the economy. Digital payments will help you solve all your financial problems.

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