GST 2.0: A Fiscal Stimulus to Unleash India's Consumption Power and Demographic Dividend
UPSC Relevance
Prelims: Indian Economy (Fiscal Policy, Taxation - GST, Demographic Dividend, Inclusive Growth, MSMEs, Social Security).
Mains:
General Studies Paper 1 (Society): Population and associated issues; Social empowerment.
General Studies Paper 2 (Governance & Social Justice): Government policies and interventions; Welfare schemes for vulnerable sections of the population.
General Studies Paper 3 (Economy): Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment; Inclusive growth.
Essay: Topics on Demographic Dividend, Consumption-led growth, Viksit Bharat.
Key Highlights from the News
The article argues that the new tax reform, GST 2.0, is a strategic move aimed at leveraging India's demographic dividend.
Its main objective is to boost Private consumption, which accounts for over 60% of India's GDP.
By reducing taxes, households have more disposable income, which increases demand for goods and services.
This is expected to create a "virtuous cycle" of investment, employment, and consumption.
Exempting health and life insurance from GST will help increase insurance penetration and strengthen social security.
Simplifying tax rules for MSMEs will encourage them to join the formal economy and support young entrepreneurs.
COMMENTS