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Structural Reforms

Reforms 
By Arpit Sharma
Present scenario implies that India is going through an economic slowdown. Country’s GDP growth is the slowest in the last 11 years, there is a huge burden of NPA’s on the banks. India is sitting on a huge pile of Fiscal Deficit. Inflation is also high, and the trend is of smart investment and divestment.
The reasons behind these problems are more or less same i.e. the structural changes which happened due to GST and demonetisation. Citizens need to understand that economic reforms take time to show its positive effects. If during 1991, our Finance Minister Dr. Manmohan Singh wouldn’t have introduced the policy of Liberalisation, Privatisation and Globalisation, wouldn’t have opened our economy for private sector to enter then our economy wouldn’t have survived and grown. In the same way GST is the need of the hour.
GST in a way has brought federalism in the country. If we look at the major problems in our country like problem of roads, electricity, education, healthcare, water supply and purification basically comes under the control of state government. Even though states collectively consume more amount of the government spending as compared to the centre, the issues are still there. Before GST most of the states tried to compete with each other on the basis of a tax cut. For instance if one state used to introduce a tax cut then the other states would try to compete by introducing a larger tax cut which resulted into a deficit. One of the best things that the Modi administration did is the introduction and implementation of the GST, in which all the government revenues gets collected under one pool and then a particular percentage is given to each state. Now after the implementation of GST, no state can introduce a tax cut separately and if states want to introduce a tax cut then it has to go to the GST council where the decision would be taken if 2/3rd of the majority agrees. Now states can compete with each other only on the basis of better infrastructure, education, health, water supply and purification which anyway would lead to a competition for the betterment of the country.
Reforms like GST will obviously take time to show their positive impact even at the cost of a temporary economic slowdown but at the end of the day it is for the betterment of our country, its sustainability and its future.
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