India’s Tax Reform Needs More Economics, Less Politics
Appointing the prime minister’s enforcer to fix the GST won’t improve a badly designed system that’s rife with fraud.
Fixing a bad tax that’s rife with fraud.
Photographer: Prashanth Vishwanathan/Bloomberg
Prime Minister Narendra Modi has often described the reform of India’s indirect taxes as his landmark achievement. In 2017, a patchwork of national, state- and local-level sales and excise levies were replaced by a single goods and services tax that economists claimed would increase government revenue while also being business friendly.
More than eight years on, it has become clear the GST hasn’t met expectations. The government recently announced that Modi’s right-hand man, Home Minister Amit Shah, would be put in charge of negotiations to fix it.