GST: A turning point?

The recent upsurge in revenues offers the prospect of the country breaking out of the long-stagnant tax-to-GDP ratio

For the last 25 years, our tax-to-GDP ratio has been stuck at between 16 and 17 per cent, severely constraining our fiscal capacity to devote more resources to our underinvested sectors such as education and health. The State in a large country like India cannot discharge its developmental function with such a low fiscal capacity. Even at our levels of per capita income, we should be nearer to a 20 per cent tax-to-GDP ratio given the norms of other emerging market economies. Is there hope? I believe so.

The goods and services tax (GST) reforms offer the prospect of raising the