HAS DEMONETIZATION AND GOODS AND SERVICE TAX BROUGHT FINANCIAL REFORM IN THE COUNTRY?
The Demonetization and Goods and service tax brought undeniable alterations in the country. The intention of the both reforms are not same but it varies in its form and composition. The above said reforms brought transparency and by increasing the purview of formal sector by bringing informal sector into its ambit.
The three years of Narendra Modi lead Government brought so many reforms to revive the economy but the prominent among them and which attained the centre of attraction is Demonetization and GST.
The another side RBI also in response to the business environment in the market it improved the availability of credit to the business .The Government of India brought Insolvency and Bankruptcy code bill for the companies those who are defaulted by the Banks and also it brought Labour reforms bill in the country in view of vast population.
India improved its ranking in ease of doing business from 140th to 100th place in the World Bank report. This spectacular achievement will have tremendous impact on the India in foreign countries. This position will pave the way for International credit rating agencies such has Moodys,Goldman sachs etc will provide positive ratings to us. These measures will help to integrate with the Globalization speedily so that it will generate lot of employment and business. The NITI AAYOG taking the spirit and success of the World Bank has decided to rank the states according to there performance. This will improve the states to implement the reforms in administration and also strengthen the transparency in the system.
The Government of India to took surprise decision on 8th November 2016 to Demonetize the high value paper currency in the economy that was in circulation, because the composition of this money is sky rocketing from year to year due to counterfeiting of currency by the Pakistan ISI agency and its proxies .
The illegal money entering into our country through various roots and making inroads into the India. The Demonetization acted has short in the arm of the Government which intended to give blow to anti-national activities and other menace of violence. The Demonetization had choked the funding routes to the terror organizations, it curbed the menace of Black money to a certain extent, and also over a period of time it reduces the inflation. The other factor which gives a big relief it intended to reduce the composition of cash in the economy to a great extent. The Demonetization had paved way for Digitalization where Government of India intends to dwindle the composition of cash in the economy for that it gave impetus to online transactions and E-PoS machines for merchants to have online transactions.
The another important reform that attained the attained is the GST. It is the biggest ever tax reform in the independence India where multiple tax system persisted and had became the hindrance for the growth of business in the country.
The GST reform was first mulled by NDA Government under able leadership of A.B.Vajpayee and for this he constituted a committee under Asim Dasgupta an MP from West Bengal in 1998.The successive Governments gave full support to the GST committee ,but the NDA lead Government under the stewardship the dynamic leadership Narendra Modi rolled out GST on 1st July 2017 and eulogized has the biggest ever indirect tax reform in the country.
The GST was intended to bring 'One country ,One tax', policy for uniform tax rate throughout the country but it was rolled out on 5 different tax slab rates. The GST used to break the multi tax system in federal Government and used to spur the indirect tax system.
The Demonetization and GST are the two biggest reforms which were addressed by the Government one after the another to stimulate the growth and development in the country. These are glorified are biggest financial reforms by the Government of India after 1991 reforms initiated at that time. These are intended to simplify the system that was outmoded, bringing Digitalization and bringing informal sector into formal sector. These reforms yielded the desirable results and attained the attention of the International credit rating agencies.