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Economy
2017
GST and Reforms

What is/are the most likely advantages of implementing ‘Goods and Services Tax (GST)’?

  1. It will replace multiple taxes collected by multiple authorities and will thus create a single market in India.
  2. It will drastically reduce the ‘Current Account Deficit’ of India and will enable it to increase its foreign exchange reserves.
  3. It will enormously increase the growth and size of economy of India and will enable it to overtake China in the near future.
  4. It will replace multiple taxes collected by multiple authorities and will thus create a single market in India.
  5. It will drastically reduce the ‘Current Account Deficit’ of India and will enable it to increase its foreign exchange reserves.
  6. It will enormously increase the growth and size of economy of India and will enable it to overtake China in the near future.

Select the correct answer using the code given below:

C.1 and 3 only
D.1,2 and 3
A.1 only
B.2 and 3 only

Correct Answer: Option A

The Goods and Services Tax (GST) aims to create a single, unified market in India by replacing multiple indirect taxes levied by the Central and State governments.

While GST can contribute to economic growth and potentially improve the trade balance, it is unlikely to drastically reduce the Current Account Deficit (CAD) or enable India to overtake China in the near future as these are influenced by many other macroeconomic factors.

Statement 1 is correct. Statements 2 and 3 are not correct. Hence, only statement 1 is correct.

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