GST successful only partially. Did not benefit the common man as expected?

It may be too soon to quantify about the success regarding the Goods and Services Tax, which was launched with fanfare and much criticism on June 30-July 1 midnight last year. It would be fair to say, however, that it was no a success on the whole but rather partially. As this didn’t benefit the common man to the extent as expected because the merchants/traders didn’t pass on the benefits of raw material costs, etc to the consumers. This is a failure on the government’s part.

It should be made clear that inflation means rising, not decreasing, and the Reserve Bank levied a quarter percent rate hike in its latest monetary policy to control this. The goal of “one nation, one tax” seems to be an empty dream.

To some extent, different rates are understandable as India’s population is not homogenous, especially in economic wealth. There’s still confusion over compliance. To this extent, Arun Jaitley should accept some blame as he introduced it in a hurry in July 2017, instead of the original date being fixed for September. As the country was still gaining its consciousness from the senseless demonetisation move. And with the half-baked GST being served, these two “reforms” pushed GDP down by two per cent that year.

The GST was to fish in for a huge population into the tax net. The indirect taxpayer base has increased by over 50 percent, with 3.4 million businessmen coming into the taxpaying bracket. Small traders and small and medium industries were hit hard. They did not have the resources to compute with these taxes properly. It was only chartered accountants and lawyers who made money on their misery. Even the collections through GST, which was to amount to over Rs 1 lakh crore in revenue, did not materialise. These are still in the Rs 95,000-97,000-crore range. One can only hope that the second year will see an improved GST.