Next gen gst: The proposed reform in Goods and Service Tax (GST) can be implemented in the middle of the current financial year. But due to this, many big states have expressed concern that their revenue will suffer heavy losses when the Next Generation Reform is effective. According to the government officials of the states, due to the proposed reforms, they can suffer a loss of Rs 7000 to 9000 crore every year. According to the report of Indian Express, this shortage can have a direct impact on the social development and administrative functioning of the states.
Effect on revenue growth
States say that according to internal assessment, the speed of revenue growth can come down to 8%. This rate has been 11.6% in the last few years, while it was about 14% before GST was implemented in 2017.
UBS estimate
According to the International Brokerage House UBS, the revenue loss from GST in FY 2026 is eligible. According to this estimate, annually, there may be a loss of 1.1 trillion rupees i.e. 0.3% of GDP. At the same time, in 2025-26 this loss can remain up to about 430 billion rupees (0.14%of GDP). This deficiency can be compensated through RBI’s dividend and additional surplus cess transfer.
The report quoted by news agency ANI as saying that GST cuts are more effective than individual income tax or corporate tax cuts to promote consumption, as it directly affects shopping.
Significantly, in a speech from the Red Fort on Independence Day, PM Modi announced the implementation of Next Generation GST Reform before Diwali. The government says that the direct benefit of this reform will be given to consumers, small industries and MSMEs.
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