The Indian government has been striving to reduce its fiscal deficit, which stood at 6.8% of the GDP in the previous financial year. One of the key measures to achieve this goal is through prudent GST reforms. The GST Council has been actively working towards simplifying the tax structure and reducing the number of tax slabs. As of now, there are four tax slabs – 5%, 12%, 18%, and 28%.
The Council is planning to merge the 12% and 18% slabs, which would lead to a reduction in the overall tax revenue. However, this move is expected to increase compliance and reduce tax evasion. According to a report by the Ministry of Finance, the GST revenue has shown a steady increase over the past year, with a growth rate of 12%.
The government aims to achieve a fiscal deficit of 5.5% of the GDP by the end of the current financial year. With the help of GST reforms and other fiscal measures, the government is confident of achieving its target.