India Tax Reform May Help Accelerate GDP Growth Above 8 Percentby and
Jaitley cites IMF’s projections on medium term growth
Goods and services tax will replace more than a dozen levies
India’s economic expansion is tied to the global economy, but it could grow faster than 8 percent as the nation prepares to implement a national sales tax from July, Finance Minister Arun Jaitley said.
The goods and services tax will eliminate multiplicity of taxes and make India a single common market, Jaitley said, addressing G-20 finance ministers and central bank governors in Washington Friday night. India’s growth is resilient, he said.
The goods and services tax will replace an archaic web of levies and improve ease of doing business in a country with more than 1 billion consumers. Proposed over a decade ago and then refined several times to win bipartisan support under Prime Minister Narendra Modi, the tax is scheduled to be rolled on July 1.
India’s economy may expand 7.2 percent in 2017 and 7.7 percent in 2018, according to the GDP updated forecasts from the April 2017 World Economic Outlook by the International Monetary Fund.
India’s medium term growth is poised to rise above 8 percent, Jaitley said, citing the IMF projections.