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GST & Demonetization - Changes to Indian Economy

Jul 27, 2017

MUMBAI, INDIA - World Trade Centre Mumbai organized the Convocation Ceremony of Meghnad Desai Academy of Economics (MDAE) at its premises on July 26, 2017. Mr. Shaktikanta Das, recently retired Economic Affairs Secretary, Government of India, having served the government for 37 years in various capacities, addressed the gathering on the occasion. Mr. Das said, “The Indian economy is witnessing transformational change like never before. Introduction of Goods and Services Tax (GST) and demonetization are the most disruptive policy measures that will bring transformative changes in the economy. These two measures will bring the parallel economy (economic activities that are not under the official tax net) to the mainstream or real economy. This will provide a major boost to India’s GDP growth. I expect the Indian economy to grow 7.5% in 2017-18 and 8-9% in the following years”.
Mr. Das informed that the time taken for transporting goods across states in India has fallen 30% after the implementation of the GST. Before the introduction of GST, cargo trucks used to spend 48 hours at the checkposts of state borders. Now, with the implementation of GST, around 24 states have eliminated border checkposts and this will ensure timely transportation of perishable goods across borders, Mr. Das pointed out.

After the historic measure of demonetization in November 2016, the number of income tax payers has risen by several lakhs in India. The increase in the number of tax payers will boost the revenue collection of the government and thereby lead to growth in government spending on education, health, infrastructure and other development projects, Mr. Das remarked.

Speaking about the recent policy measures taken by Government of India, the former Economic Secretary highlighted steps to promote transparency in governance, reforms in foreign direct investment, improving ease of doing business, integration of railway budget and general budget, among others.

Specifically, Mr. Das mentioned that today it is possible to register a company in 48 hours in India and the income tax department has reduced the time taken to settle refund claims of personal income tax. “Today, the entire procedure for refund of personal income tax has been made online and tax assesses get refund in their bank accounts within 2-3 months,” Mr. Das observed.

He also informed that Government of India has opened around 26 crore bank accounts for unbanked people under the ambitious Jan Dhan Yojna in the last 2.5 years.

Speaking on this occasion, Captain Somesh Batra, Vice Chairman, World Trade Centre Mumbai remarked, ”I am delighted and honoured to be part of this event. I am also happy to note that the percentage of girl students passing this year is far higher (65%) than that of boy students. Economics has considerable significance in real life and academic institutions must ensure that more students choose this discipline in their higher studies. World Trade Centre Mumbai is committed to provide all possible support to the Meghnad Desai Academy of Economics in its endeavour toward excellence in education.”

Lord Meghnad Desai, Chairman of MDAE explained the relevance of economics in today’s world and how economists form predictions on various business and macroeconomic phenomena.

In Photo from (L-R): Lord Meghnad Desai, Chairman of MDAE, Mr. Shaktikanta Das, retired Economic Affairs Secretary, Government of India and Captain Somesh Batra, Vice Chairman, World Trade Centre Mumbai