India's Fiscal Reforms - Rhetoric and Realities

In the economic history of our country, there have been some significant developments in the formulation, enunciation and management of fiscal policies over the last decade.

- Sitaram Sharma

 

In this era, concerted efforts have been made to simplify the tax structure. Introduction of the Direct Tax Code (DTC) and GST were considered as the two major initiatives for such simplification. So far, the DTC has not seen the light of day, but, fortunately, after several rounds of debate and discussions, GST has been introduced.

It has however been observed that introduction of GST and the demonetisation that preceded it, have caused some serious dislocations to trade and industry, particularly in the informal sector and MSME sector. Besides, there have been some adverse effects of demonetisation in the agriculture and construction sectors which has stagnated employment generation.