Govt sets inflation target at 4% for five years
These figures are important because a GST regime is likely to lead to a rise in inflation.
After the passage of the Goods and Service Tax (GST) Bill in the Rajya Sabha, the Central government on Friday set an inflation target for next five years i.e. till March 31, 2021, at 4%, Alok Priyadarshi of Zee Business reported.
The target was set in consultation with the Reserve Bank of India (RBI), Priyadarshi said.
The upper tolerance level has been kept at 6%, by the government, and the lower tolerance level is at 2%.
These figures are important because a GST regime is likely to lead to a rise in inflation.
ZeeBiz had earlier reported that the economic impact of the GST Bill will depend on the finer details, including the final rate, threshold levels, the list of exemptions, and a clarity on the processes.
In a research report titled "India-Upper house clears the way for GST" by Standard Chartered, it said that in the near-term the growth impact of GST implementation is likely to be negative as the economy adjusts to the new tax structure. As it seems right now, GST rate is expected to be set in the 18-22% range.
Experts have opined that a GST rate higher than 20% could adversely impact inflation and growth. However, assuming tax rates are set at appropriate levels, the GST is likely to have a positive impact on GDP, inflation and the fiscal deficit over the medium-to-long term, the report said.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
Power of Compounding: How many years will it take to reach Rs 3 crore corpus if your monthly SIP is Rs 4,000, Rs 5,000, or Rs 6,000
IRCTC Dividend 2024: Railway PSU announces 200% interim dividend - Check record date and other details
Power of Compounding: Salary Rs 25,000 per month; is it possible to create over Rs 2.60 crore corpus; understand it through calculations
Reduce Home Loan EMI vs Reduce Tenure: Rs 75 lakh, 25-year loan; which option can save Rs 25 lakh and 64 months and how? Know here
Top 7 Large and Mid Cap Mutual Funds with Best SIP Returns in 5 Years: No. 1 fund has turned Rs 15,000 monthly SIP investment into Rs 20,54,384; know about others
New Year Pick by Anil Singhvi: This smallcap stock can offer up to 75% return in long term - Check targets
PSU Oil Stocks: Here's what brokerage suggests on these 2 largecap, 1 midcap scrips - Buy, Sell or Hold?
01:03 PM IST