V S Krishnan

Budget 2026 advances trust-based Customs reforms and sector-specific relief, but stops short of a clear tariff-cut roadmap needed to boost MSME-led manufacturing growth

However, while evaluating the GST reforms, the fundamental goal must not be forgotten. It was to raise the GST tax-to-GDP ratio by widening the tax base, by improving compliance

The finance ministry is clear in its message that the reforms would be comprehensive, going beyond rate rationalisation. The question is how the government should go about it

Rate rationalisation should not be viewed in isolation as a revenue exercise, but as one integrated with trade policy and broader macroeconomic objectives

In the past 25 years, India's growth rate has been stuck around 6 per cent except the period 2006-10, when India briefly reached 8 per cent

GST rate rationalisation and expansion must be done not only to achieve simplification but also to subserve large-scale employment and environmental policy goals

It would have been better had the government gone in for across-the-board Customs duty rationalisation instead of picking and choosing sectors across the board

An audit system has great advantages over routine tax return verification but requires greater skills

It will give an impetus to factor market reforms, which are essential to drive India's growth

The Budget could have outlined a three-tier Customs duty structure with minimum rate on raw materials, a slightly higher rate on intermediates, and the highest rate on finished products

The tax reform's happy ending hinges on appropriate policy reforms, which require mining the rich vein of GST data for deeper insights by research outfit

The Finance Minister clearly mentioned that the government will rely less on market borrowings and, thereby, facilitate more credit availability for the private sector from the banking system

There is much to commend in the Budget, especially the substantial increase in capital expenditure

The environmental dimension of taxes must rank high in any rate rationalisation exercise

Going forward, we also need to look at inclusion of items in the GST from a larger macro perspective

The capital goods component is especially important now in view of the mandated guidelines for installation of pollution control equipment

A revision of slab rates may create some disquiet, but, if cleverly crafted, it could be a game-changer for manufacturing

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

Besides merging the rate slabs of 12 per cent and 18 per cent, the GST Council could consider phasing out exemptions to those commodities that were subject to VAT duty by the States

GST has achieved a lot in three years, but there is an unfinished agenda