Economic Reforms


At the stroke of midnight hour, when the world sleeps, India will awaken to economic reforms and a faster pathway to development. It is fitting that at this solemn moment, the introduction of the GST will be commemorated by a loud gong, which shall echo in new changes and national progress. Yes, there exists a strong resonance of Jawaharlal Nehru’s ‘Tryst with Destiny’ speech in this unprecedented journey to economic progress.

On the midnight of June 30th, the most significant economic reform since BJP’s rise to power will receive the official green light for implementation. The Goods and Services Tax (GST), which has been under the wraps for a few years now, will mark its rollout by a special midnight session in the Parliament. Both the Houses of the Parliament will meet to collectively welcome the economic change at the Central Hall, with the President Pranab Mukherjee, Prime Minister Narendra Modi, and Finance Minister Arun Jaitley addressing the assembly from 11 p.m. on June 30th till 12:10 a.m. on July 1st.

What is GST?

The Goods and Services Tax (GST) is touted to be the harbinger of a dramatic makeover of the Indian economy. The tax aims to unify a web of taxes which are currently levied on the Indian consumers, including the VAT, excise duty, and service tax. A four-rate structure that imposes a low rate of tax of 5 per cent on essential items and the top rate of 28 percent on cars and consumer durables has been finalised. The other slabs of tax are 12 and 18 per cent.

When is it launching?

After smoothing over the major stubs on the way, the tax is all set to be launched on the midnight of June 30th and July 1st at the Central Hall. The Chief Ministers of all states have also been invited for the launch as it is being touted as a means of fiscal transparency and freedom. The function will be an hour long and will witness the President and Prime Minister speak on this economic transition. Two short movies will also be screened in this ceremony.

Arun Jaitley, the Finance Minister, said, “When the switchover takes place, in the short term there will be some challenges,” and added that it is “not a complicated process.”

Is GST revolutionary?

Policy makers deem it as the biggest reform in Indian economic history since the Independence. The launch of GST is projected to add 2 points to the country’s GDP growth rate, along with the widening of the tax net which tacitly increases government revenues. The implementation of this unified tax stems from the objective of simplifying the tax administration, minimising tax rate slabs, preventing detrimental competition between states, and increasing compliance. However, the obvious obstacles which pave the way include training of necessary manpower for implementation, lack of clarity of mechanism, and uncertainty of the overall impact. The tax primarily subsumes all regulations levied by the state and central government, and offers one replacement for all. The GST Council has met 17 times to work on the strings of the plan. More than 65 lakh businesses have signed up to undergo this process, and will be allowed a leeway of the first two months to file returns.

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Saumya Kalia

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No country, nation or for that matter society is a perfect one. It has its inherent flaws that need to be worked on. Be it social, political or the economic sphere, the need of reform is always felt when stagnation is witnessed. The human society across the world is affected by various problems such as the class system, caste system, racial discrimination etc.

When we talk about the Indian society, one of the biggest problems that has existed since ages is the ‘Caste System’. It categorizes people on the basis of their occupation and simultaneously compels people from a particular caste to adopt a certain occupation irrespective of their will and acumen. Over the period of time, this stratification has degenerated into a tool of subordination of the classes ranking in the lower parts of this strata by those on the top of it.

One of the great thinkers and a reformer, Dr. B.R Ambedkar, who himself was a victim of caste-based discrimination argued as to how social reform should take precedence in the Indian society. Karl Marx, in his works, described as to how the problem of the class divide can be solved by economic reforms with the Proletariats seizing the means of productions which in turn would bring a social change.

Babasaheb, however, argued that the same doesn’t hold well within the Indian society infested by the Caste system. He argued that unlike in other societies, ownership of economic resources doesn’t necessarily translate into social power in the Indian context. He explained this by giving the example of how Brahmin priests and Sadhus, who are supposed to live on ‘Dakshana’, indicating a lack of ownership of resources. Despite this, however, they are epicenters of social power according to our social system.

The same is the case with political reform. Any political reform without the appropriate social changes preceding them would only perpetuate the social differences. A bureaucrat or a Judge who himself/herself stigmatizes against the oppressed is going to do no good irrespective of whatever political reforms may take place.

Therefore it is imperative for Social reform to precede Political or Economic reform in order to proceed towards a better society. Unless we put an end to the oppression and integrate even the most left out and stigmatized sections, the ideal society which we want to build would remain to be a distant dream.

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Aditya Narang

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