Demonetization and GST reasons behind Economic Slowdown

Demonetization and GST

Demonetization and GST these are the two major decisions which Narendra Modi took in his last five-year term. And the biggest jolt who faced is the Indian economy. That was growing at the time of demonetization at a rate of 7%. Many businesses suffered because of the scarcity of the cash flow. As we as all know that India is a cash-driven economy. And most of the businesses whether small  or big are works on cash since ages. It lowered the growth rate activity by at least 2% points in a quarter of demonetization

It was also expected that its effect will be dispelled over the next few months. Which eventually happened but the impact was very devastating. The major goals which the government tried to achieve through this process were to curb black money, destroy hawala (cash unregistered taxable money)  network, and push towards the digital economy. No data has been provided by the government for the first two points.

Digital economy, after two years in Nov The Hindu business line published in their article about how the digital transaction has shown robust growth. As per the report digital payments profoundly popular in channels.  Such as National Electronic Fund Transfer (NEFT) and mobile banking between September 2016 and September 2018.

On 1st July 2017 which is also celebrated as a GST day in India, was another decision taken by the same government next year. When the country was still recovering from the impact of demonetization. ONE NATION ONE TAX was the tag line of GST. Businessmen were completely baffled as the government has introduced the whole new taxation system. Though it is not very difficult to understand yet hard to keep records. But the government keeps asking them to maintain record every month. Doing business is becoming tougher.

Government has categorized these products into different categories which itself is very confusing. And for that Narendra Modi government has taken many measures like they have released android app GST rate finder. They have also updated it on their web portal.

Overall both decisions were taken in a hurry. But now the country has survived GST, it is very crucial for the Indian economy and with this logistic sector is really growing. As trucks now don’t have to wait on state borders. And also the digital economy, in which India is going to be a leader in the near future

 

GST Return Its Types and Filling Process

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