GD Topic: Will Economy Grow Faster with Reduced Rates of GST?
Among current trending GD Topics admission to top MBA colleges in India this year, could be about the reduction in the rates of the Goods and Services Tax (GST).
By Aritro Dasgupta
This article was first publsihed on August 26, 2019.
Students often make the mistake of allowing complacency to seep in, once all the MBA entrance exams are over. But clearing these exams is only half the job done. The real test is personality assessment. One of the most popular methods to assess students’ personality, is via Group Discussions (GDs). A GD typically pits in any trending topic of strategic importance for the students to debate on. This assessment is done to test the students’ knowledge of the GD topic, creativity and team work capacity.
Among current trending topics, economy, sports, culture, polity and business topics are the most frequently used. One such topic that may be of much importance to the GD rounds of admission to the top MBA colleges in India this year, could be about the reduction in the rates of the Goods and Services Tax (GST). There are several points in support of this initiative, but also some that go against the same. Students are free to use their choice of judgement. One must remember, in a GD, multiple answers could be correct. The students need to logically and factually justify their viewpoints though. In fact, they could even remain neutral, by imbibing positives and negatives on both sides of the divide.
Check: Top MBA Entrance Exams You Can Take in 2023
GD Topic: Will Economy Grow Faster with Reduced Rates of GST?
To address this topic, first we need to understand, in which product categories the government has reduced the GST rates.
Following are some of the major items that got slashed by ten per cent from twenty-eight per cent to a new of eighteen per cent:
- Concrete mixers
- Crane lorries
- Cosmetic pads
- Scent sprays
- Toilet sprays
- Paints
- Varnish
- Washing machines
- Vacuum cleaners
- Refrigerators
- Water coolers
- Juicers
- Mixers
- Shavers
- Hair clippers
- Electric smoothing irons
In addition, there are some products that have seen a staggering 13 per cent rate cut. This includes ethanol and footwear up till a certain price ceiling. Solid biofuel pellets, rakhis and sal leaves have been removed from GST altogether, with a whopping eighteen per cent reduction. Similar effects have been made on various other products. This is a clear indication that the slab reductions have taken place not for one product, or any single group, but for a wide array of products.
Let us take a look at both the pros and the cons of this move:
Reduced Rates of GST: For the Motion
Following are some points in support of reduction in the rates of GST:
- Reduced rates should increase spending on the same. Due to the spread out nature of the goods and services whose taxes are to be cut, the said increased spending will be cyclical.
- A number of reductions have been aimed at the flagging automotive sector, thus an honest attempt to revive the fortunes.
- With reduced tax rates, the incentives to ‘not pay’, through an informal economy also reduce likewise.
- The reduced rates are also an indication that tax collections have been robust in the two years since implementation, so some easing off is now affordable.
- A number of these cuts are to be implemented from August, thus the timing has been to coincide with the upcoming festive season, which is a typically amongst the healthiest in consumer spending.
Reduced Rates of GST: Against the Motion
Some points also exist against the support of reduction in the rates of GST:
- This will lead to reduced collections in the government coffers, thus directly affecting a number of welfare schemes.
- Lower government revenue collection could also mean greater challenges in paying off government employees, especially at a time when several government-owned firms such as BSNL are struggling.
- An admission of past operational errors, cannot be compensated by belated sops, as the damage due to the teething problems have already impacted, especially in the unorganized economy.
- The entire software now needs to be realigned, which will lead to further teething concerns.
- The GST rate reduction has not been targeted cohesively towards industries that required the maximum sops during crisis. While component parts of the automotive have seen a drop, there is no overall reduction in the price of cars or other vehicles.
Thus, we clearly see, there are compelling reasons on both sides of the divide for students to choose. There is a hope that this rate cut, can fuel greater things to the economy. On the other hand, there are fears too of an upcoming economic downturn. There are macro global factors at play. The Indian economy is not immune to global shortcoming, with the economy now being so inter- connected.
While debating on this GD topic, the students must make sure that they do not resort to emotional rhetoric during the course of the discussion. To prove one’s point, cite data released by credible sources such as the Asian Development Bank (ADB), World Economic Forum (WEF), Forbes, Business Insider, Bloomberg, etc.
About the Author:
Aritro Dasgupta is a Teacher, Trainer and Content Writer. He has taught at several leading colleges and coaching institutes in both India and the UAE. Several of his students have finished in the top 10 of various national level exams such as CLAT, AILET and DUJAT. He is also a prolific content writer, having written for several leading publications in India, while currently, also working for one in the USA.
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