BJP MP Sikender Kumar terms GST 2.0 as next-generation reform

Shimla, Sep 9 (PTI) BJP Rajya Sabha member from Himachal, Sikender Kumar, has termed the GST rationalisation as a next-generation reform process, which will empower consumers, liberate entrepreneurs, strengthen economic sovereignty and chart a course for a prosperous and inclusive India.

In his article on the subject, shared with the media persons here, Kumar, who is also the former Vice-Chancellor of Himachal Pradesh University, said GST 2.0 could prove as transformative as the 1991 liberalisation or the Unified payments Interface (UPI) revolution of 2016 by linking people's growth to national productivity and lowering the consumption barriers, improving capital efficiency and strengthening institutional credibility.

When GST was introduced in 2017, billed as India's biggest tax reform since Independence, it was hailed as an act of national unification for unifying the national market, freeing it from the complex web of excise, VAT and service taxes, the renowned economist told PTI on Tuesday.

Asserting that GST 2.0 was a masterstroke to stimulate aggregate demand, accelerate economic formalisation, enhance industrial competitiveness and stabilise inter-governmental fiscal relations, Sikender said, "It is a growth philosophy in action that harmonises lessons of Keynes (demand stimulus), Harrod-Domar (efficiency booster), and the Neo-Keynesians (institutional stability) to prepare India for short-term dynamism and long-term resilience.

If implemented effectively, this multi-dimensional growth lever has all economic ingredients to improve India's fiscal architecture and propel the country onto a trajectory where every rupee spent, saved, or invested would yield greater national wealth, he added.

The government envisions these next-gen GST reforms to significantly energise the economy, potentially adding Rs 20 lakh crore to Gross Domestic Product (GDP) and these next-stage reforms have come at a crucial juncture, when India has already become the fourth-largest economy in the world and aims to reach a USD 10 trillion size by 2047, he emphasised.

He stressed that these reforms also required the transformation of institutions, creating demand, enhancing productivity and developing resilience to global headwinds, and the genius of GST 2.0 lies in its design, which can be captured in one word, "Progress".

Indian households are in focus in GST 2.0, and the cuts make daily life more affordable as essentials like soaps and bread would now attract 0-5 per cent GST. Health and life insurance are fully tax-free, tax on cars and appliances has been reduced from 28 to 18 per cent, and these reforms will ease household budgets and promote families to spend more confidently, driving consumption, he observed.

These next-gen GST reforms promise a unified national market which would rationalise and simplify compliance and remove classification disputes, and also encourage a mass-scale move from the informal to the formal economy, bringing millions of new taxpayers into the fold.

GST 2.0, though initially causing some revenue sacrifice, charts the roadmap for robust collections in the medium term as compliance would improve and lower GST rates would boost consumption, he claimed. PTI BPL BAL BAL