UPSC CSE Prelims
Question 66
What is/are the most likely advantages of implementing 'Goods and Services Tax (GST)' ?
- It will replace multiple taxes collected by multiple authorities and will thus create a single market in India.
- It will drastically reduce the 'Current Account Deficit' of India and will enable it to increase its foreign exchange reserves.
- It will enormously increase the growth and size of economy of India and will enable it to overtake China in the near future.
Select the correct answer using the code given below :
View correct answer and explanation
Correct answer: A
Correct Option: A
Explanation: GST was designed to subsume several indirect levies and build a more integrated national market. It does not mechanically cure the current-account deficit or guarantee India will surpass China.
Statement/Pair-wise Analysis:
Statement/Item 1: Correct - GST integrates many central and state indirect taxes into a harmonised tax framework.
Statement/Item 2: Incorrect - The current-account deficit depends on external trade and capital flows; GST alone does not drastically erase it.
Statement/Item 3: Incorrect - GST cannot guarantee a particular massive growth trajectory or immediate surpassing of China.
Option-wise Analysis:
A: Correct - includes all and only the true statements/items.
B: Incorrect - includes incorrect statement/items 2, 3; omits correct statement/item 1.
C: Incorrect - includes incorrect statement/item 3.
D: Incorrect - includes incorrect statement/items 2, 3.