Nomura Predicts Minimal Inflationary Impact from GST Implementation
Nomura, a Japanese financial research firm, projected that India's Goods and Services Tax (GST) implementation would lead to a minimal increase in inflation, specifically less than 20 basis points. While expecting a slight negative impact on economic growth in the short term, the company believes GST will be fiscally neutral initially. Ultimately, Nomura echoed the government's view that GST will boost productivity, reduce costs, aid economic formalization, and generate significant government revenue by eliminating cascading taxes.
Nomura's Outlook on GST's Inflationary Impact in India
Japanese financial research firm, Nomura, indicated that the Goods and Services Tax (GST) would likely have a minimal effect on India's inflation rates. According to their assessment, the price impact would be below 20 basis points.
Despite this low inflationary expectation, the company forecasted that economic growth might experience minor challenges leading up to the GST's introduction. Nomura described this as a "marginally negative" influence on growth, suggesting that GST would be fiscally neutral in the immediate future. The financial institution also echoed the government's stance that, eventually, GST would eliminate the cascading tax effect. This change is expected to enhance productivity, reduce expenses, contribute to economic formalization, and generate substantial revenue benefits for the government. (Source: economictimes.indiatimes.com)