Morgan Stanley: GST Reforms to Boost India's Consumption, Demand

Morgan Stanley has projected that India's upcoming GST reforms, supported by tax cuts and policy easing, will significantly boost consumption and domestic demand.

- TBG NETWORK

An overhaul in GST rate slabs, coupled with support from other measures such as personal income tax cuts, monetary policy easing, signs of pickup in job growth and improving real wages, will improve the outlook for consumption and domestic demand in India, according to a report by Morgan Stanley.

The central government is likely to conduct a major overhaul of GST, a major source of indirect tax rates. Morgan Stanley, in a report dated August 17, said this next-generation reforms should support consumption.

"Apart from this, personal income tax cuts, monetary policy easing, and signs of a pickup in job growth and improving real wages should also support consumption in the next few quarters," the report read, authored by economists Upasana Chachra and Bani Gambhir.