India’s indirect tax regime is showing its age. Household tax incidence, by some estimates, is now at its highest since 1988, creating a sustained drag on disposable incomes and compounding the decline in real earnings over recent years.High GST rates on everyday goods, coupled with elevated fuel taxes, have steadily eaten into purchasing power and muted consumption demand. Reducing this burden is no longer just a matter of fine-tuning the tax system; it is an essential step towards restoring demand momentum in an economy where private consumption still accounts for nearly 60% of GDP.
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