GST REJIG TO BOOST CONSUMPTION, SOOTHE INFLATION

Economists say well-timed move to help partly offset negative impacts of punitive US tariffs. | Lower tax on raw materials can reduce construction costs by 3-5%.

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THE overhaul in the GST rate structure - reducing rates of most goods, in some cases slashing it to more than half - has got thumbs up from economists, who call it neither fiscally loose nor inflationary but a growth booster by way of incremental consumption. They are also of the view that the well-timed move will help partly offset the negative impacts of the punitive US tariffs kicked in from late last month.

They see the fiscal implication by way of presumptive revenue loss of 48,000 crore for this fiscal is only 0.13-14 bps of GDP. But some of them even say the likely consumption boom can in fact add 0.6% to the GDP on a full year basis.