The Steepest Cut?

During the global financial crisis, there were concerns regarding the global growth story.

- KARAN BHASIN

China emerged as an anointed knight to provide the much-needed support to an otherwise fragile economic environment. Almost two decades on, a similar story is being scripted by its neighbour, which registered an impressive GDP growth rate of 7.8 per cent in Q1FY26.

India's economic momentum is supported by a series of reforms that were initiated from the early 2010s. One such important reform was the Goods and Services Tax or the GST, which replaced the erstwhile complicated indirect taxation structure of excise and value-added taxes.

The GST, by its design, was a destination-based tax, making it self-enforcing and addressing concerns of tax cascading. The GST has done remarkably well for India's fiscal federalism as both the Union government and states have witnessed a steady stream of revenues. The strength of the system is reflected in the fact that it survived one of the largest fiscal shocks in the form of a pandemic.