India’s finance minister, Mr. Arun Jaitley stated that India has the potential to surpass a growth rate of 7-8 percent and will secure its place in becoming the fastest growing economy in the world. Jaitley stated in the India-South Korea business summit that most Indians believe that 7-8 percent growth rate is very normal as far as India is concerned. The real challenge is beating that. With the policy changes and the supportive global environment, India can definitely achieve a little more than that. India has been trying to grow and become the best as far as the manufacturing sector is concerned which is why the government is also making policies which are beneficial to domestic manufacturing.
The government is also trying to make simpler procedures which can easily attract investment and reform the taxation policies of the country. Dozens of central as well as state taxes too have been unified into a single tax system and has made processes simpler for the international investors with the implementation of the goods and services tax. At present, under the GST there exist four slabs i.e. 5 percent, 12 percent, 18 percent and 28 percent. The rate rationalization was started by the government after the new indirect tax system was implemented from 1st July.
Tax rates were cut on 40 items in October and more than 200 items were bought at a lower tax slab in November. In January, rates of about 84 goods and services were cut down. As a part of the rationalization process, there is thinning of the tax bracket of 28 percent. It has been thinned to a great extent in the first 6 months of its introduction. This exercised will be continued too. India has been a tax non-compliant as far as GST is concerned which has to be improved upon first.