13 Reasons Why GST Can Be A Messiah For Rural Economy

GST is going to be a game changer not only for the industry sector but also will be a messiah for the rural economy in terms of increased demand for durables and better understanding of the taxation.

- SP Sharma

The 70 percent of the population is in the rural segments, the Goods and Service Tax (GST) will become a catalyst for common rural market in India with the removal of state level barriers.

Rural India has undergone rapid transition in the past few years; the degree of change varies from use of technology to realising the importance of education. The United Nations regards rural development as a process of change among rural communities from the traditional way of living to a more progressive way thus being regarded as the moment of progress.

In rural India, traditionally the gram panchayats are given the constitutional legitimacy to improve local public service delivery and governance. The finances came predominantly from the two sources:

Funds devolved by State governments under the guidance of State Finance Commissions (SFCs) and; ‘Own' revenues generated locally from levies of house tax, professional tax and water charges.

In 2016-17, the finance minister unveiled Rs 19.78 lakh crore budget with a focus on the rural economy and infrastructure along with a minor rebate for small taxpayers and more money for health, literacy and roads. An amount, of Rs 87,765 crores, was allocated for the rural sector while Rs 2,000 crore was earmarked to give concessional LPG connections to BPL families.

Further, as much as Rs 2.87 lakh crore was allocated as grants in aid to panchayats and municipalities, while the allocation for the social sector - including for education and healthcare -- had been pegged at Rs 1.51 lakh crores. Thus the governments focus on the rural economy in terms of expenditure has gained momentum in the last few years, causing certain direct and indirect benefits to the rural India.