Widening GST Base Could Fetch Extra Revenue for India's GDP
The Importance of Widening the GST Base
Gita Gopinath, the Chief Economist of the IMF, highlighted the substantial opportunity for India to increase its fiscal space. A broader Goods and Services Tax base could contribute up to 1% of GDP in extra revenue, which echoes the growing need for financial resources to support various developmental initiatives.
Potential Economic Impact
- Additional Fiscal Resources: Increasing the GST base can provide essential funding for infrastructure and public services.
- Boosting economic stability through improved revenue generation.
- Enhancing government capacity for social programs.
Conclusion on Fiscal Space Creation
The current stage of development in India necessitates an innovative approach to fiscal policy. Gopinath's insights indicate that without increasing spending reduction, expanding the GST framework will be crucial in generating necessary funds and ensuring sustainable growth.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.