GST rationalization may enhance consumption, no long -term revenue: S&P

The S& P Classification Agency said on Tuesday that it does not expect to rationalize the proposed prices under the GST tax on the long -term revenue sets, while in the short term, spending on consumption may enhance.

“With the proposed rate, the actual rate can be less, but due to the easiest implementation and accounting operations, there may be a batch of long -term financial revenue,” said Yifarn Phua, Director, Financial Categories for General Finance, Global Categories of the S&P in the Web River on Tuesday.

Although there are still very early days to measure the actual financial impact of the proposed step, it is unlikely that the government will reform the tax system to the point that it will reach revenues.

Responding to questions during an online symposium on “upgrading the internal classifications of India: financial institutions, financial institutions, and companies, Fawa emphasized that over the five years to the past six years, goods and services tax reforms have proven to be very successful and were a major source of government revenue.

He pointed out that the reforms of commodity and services tax are discussed between the center and the various states of the states before submitting the result to the commodity and services tax council, and said that it will take some time to play.

In his speech on Independence Day, Prime Minister Narendra Modi announced the GST reforms from the next generation by this Diwali, which aims to reduce taxes on daily use materials. This requires two rates of 5 % and 18 % with an increase of 40 % during the disposal of the current rates of 18 % and 28 % under the indirect tax tax.

A day before, on August 14, the S& PLBAL Ratings upgraded the long-term sovereign credit evaluations in India to “BBB” from “BBB-” with a straight view, citing the prosperous economic growth in the country, against the background of the improved monetary policy environment that feels inflation.

In response to the questions about whether the upgrade, which came after 18 years, was very few, very late, Fawa said that the agency is generally taking a long -term vision.

“If you look at India’s performance as an economy over the past ten to 20 years, there are courses below, economic growth, have been assembled.

He also pointed out that there are some advantages such as the fact that the government only funds itself in local currency, and the (economic) growth is very fast, which helps to stabilize many credit measures. In a country, it was smaller and in growth heroes, this financial rush and financial deficit can have a very harmful impact, but India managed to calm this due to strong growth and very large local market.

He said: “We finally realize that, yes, it is time to move, not because of any one event, but in fact a note over the past decade of how many of these factors are now gathering to bring India to a stronger growth path.”

The agency also emphasized that the US tariff for the United States is unlikely to affect the long -term growth prospects in India, as the government focuses on economic reforms and trying to improve the standard of living of people. Fawa said: “Go ahead, we expect this growth dynamics to launch over a period of 3 years, as the average growth reached about 6.8 %. If the infrastructure and communication in India improved, it will remove the bottlenecks that hinder economic growth in the long term and increase the course of the potential growth of India.”