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Businessweek
Economics

Bribes, Borders and Middlemen: Why India's GST Is a Game Changer

  • New tax reform will reshape India’s industrial landscape
  • ‘I have not got any training. I only know that GST is coming’
A worker standing on the roof of a truck is reflected in a large puddle at a truck stop at the Bara Bazar market in Shillong, Meghalaya, India, on Tuesday, Aug. 16, 2016. Indian state-run banks bought a record amount of sovereign bonds Monday after a selloff following the naming of Urjit Patel as the next central bank governor pushed yields to the highest in almost seven months.

A worker standing on the roof of a truck is reflected in a large puddle at a truck stop at the Bara Bazar market in Shillong, Meghalaya, India, on Tuesday, Aug. 16, 2016. Indian state-run banks bought a record amount of sovereign bonds Monday after a selloff following the naming of Urjit Patel as the next central bank governor pushed yields to the highest in almost seven months.

Photographer: Sanjit Das/Bloomberg

Seized vehicles. Bribes. Days-long delays. Moving goods across Indian states isn’t exactly easy -- and that’s a major barrier to economic growth.

Rolling a truck of vegetables into Gujarat, the state once governed by Prime Minister Narendra Modi, requires a bribe of 500 rupees to 2,000 rupees even with your papers in order, according to Rakesh Kaul, vice-president of Caravan Roadways Ltd., which has about 400 trucks plying India’s pot-holed roads.