Experts have stated that while the lower Goods and Services Tax (GST) rates may lead to a decline in inflation, economic growth may not improve significantly in the short term even though it will benefit both India and the government in the medium term. Currently companies will now insist vendors and suppliers to furnish invoices as GST will make it impossible for firms to evade taxes.



According to sources, inflation is anticipated to ease further with GST rollout from a record low of 3% in April and analysts expect RBI may not immediately lower policy interest rates. Meanwhile Sinha of India Ratings stated that “RBI will watch out for the monsoon progress as also how the GST pans out".

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Moreover it was stated that in the last policy review, RBI had flagged concerns that the “one-off” impact GST may be inflationary. The central left policy rates unchanged in April. Meanwhile Indian economists are not sure of the immediate impact of GST and some even say it may impeded growth in the short term as big companies reorganize their businesses and as small firms lose revenue. In short GST is on positive side for economic growth for a short term period.


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