Hindustan Times | Developed country ambitions need deep structural reforms

India’s impressive growth performance has raised hopes of it becoming a developed country in the not-too-distant future. The Prime Minister has set 2047, the centenary year of Independence, as the aspirational target year. However, leapfrogging from being a low middle-income economy to becoming a developed country in the next 25 years requires raising the country’s per capita income by more than five times, from $2,600 to $10,205. This effectively translates into a per capita income growth at 7.5% per year and an aggregate Gross Domestic Product (GDP) growth at 9%. Read the full article here.

Untangling the GST mess

Now, in the 5th year of GST, it is the opportune time to look at reforming and refining the system to achieve the original outcomes of a good and simple tax. The first important reform is to broaden the base by minimising the number of exemptions and including petroleum products and electricity in the GST bracket. It can help in reducing petrol prices for end-consumers. Second, there is a need to reduce the number of tax slabs to one or two and gradually eliminate compensation cesses. This will help in reducing problems related to classification of products, disputes, and lobbying. A single rate at 15% with an aim to reduce it to 12% in 10 years should be the aim. Third, ease GST compliance costs for businesses by rationalizing the compliance requirements and having a single identification number.

Indian economy needs structural reforms & behavioural change, not macroeconomic jargon

Okay, the Indian economy is in a slowdown and it is absolutely important for us to quickly get back onto the path of high growth. Economic output is the sum of consumer expenditure, investment, government expenditure and net exports. The best way to increase growth is to increase all four of the above. There is a need for technical discussion among macroeconomists, financial analysts, business journalists and policymakers, but it cannot be the only show in town.Read more