The GST and Demonetisation are the two bold decisions taken by Indian Government (under the lasso of Narendra Modi) to tackle the existing and emerging issues which can and have been prevalent day by day in the Indian Economy. The two dates 8th November 2016 and 1st July 2017 had marked their importance in the history of Indian Economy as the implementation of both happened. But the question which still arises in our mind is whether they have improved our economy or not. Let’s take a look at that.
GST or the goods and services tax is basically a consumption based tax/levy based on the destination principle that is, it applies to the place where the good is being ‘supplied to. Although being a tax reform it had impacted the 17 other indirect taxes which were previously levied on the goods and services but now under this act, it shall not add value to the mettle of the country. The concept of “one nation one Tax” is something that formed an unbreakable chain of transactions starting from raw material till the goods consumed. On the other hand, Demonetisation is the act of stripping a currency unit making it a legal tender, the major motive behind is to combat corruption and inflation and to encourage a cashless economy. The sudden decisions had created a slight harassment when long queue outside Indian banks along with the businessmen dealing with goods and services outraged their anger but it gradually proved beneficial in the economy.
Firstly the demonetisation helped to curb the black money from the economy as the old 500 and 1000 rupee notes were blocked as the owners were not able to exchange from the bank, it had temporarily stalled the circulation of large counterfeit currency. The money supply effected the demand of goods and services also when the prices of goods fall due to moderate use of cards and cheques. The Real Estate price had also fallen as most transactions happened in cash basis. But in the long run it had helped the implementation of GST in a planned manner. It is the GST only which had helped to hit the target of making traders aware of each transactions to be made and helped to make “target people” worried and uncomfortable. The GSTIN also includes matching, reversal and reclaim of input tax credits. Thus both GST and Demonetisation helped the traders and consumers of India to assist regarding the goal of Digital Bharat where electronic tax-liability register, E-Register for cash payments, credits, proper documentation and record-keeping are necessary…hence gradual improvement has ushered in.
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