Topic- Indian Economy: Issues
3) Discuss the implementation hurdles faced by MSMEs with respect to GST? Examine the recent steps taken by GSTN in this regard?(250 words)
Why this question
MSME sector is a focus area for the government, considering the potential this sector has for the benefit of Indian economy. GST is a landmark tax reform and has had a disruptive effect on many sectors including MSME sector. However, many argue that MSME sector have in fact started reaping benefits on account of GST, with much more benefits over a longer time. This question expects you to discuss such issues in detail.
Discuss – This is an all-encompassing directive – you have to debate on paper by going through the details of the issues concerned by examining each one of them. You have to give reasons for both for and against arguments.
Examine – When you are asked to examine, you have to probe deeper into the topic, get into details, and find out the causes or implications if any .
Key demand of the question
The question expects us to highlight the issues faced and also discuss whether any advantage has accrued to MSME sector on account of GST. Thereafter, it expects us to explain the initiatives proposed by GSTN to address the issues faced by MSME sector and the impact it would have.
Structure of the answer
Introduction – Mention that MSME sector is of special significance for the Indian government, expecting it to offer higher employment opportunities by 2020. The sector forms a key component of the government’s ‘Make in India’ and ‘Skill India’ programme.
Body – Discuss the issues faced by MSME sector with GST – acclimatization issue, problems in getting ITC, infrastructural glitches etc. Explore whether GST has had certain advantageous impact on MSMEs. Give your opinion on the full potential of GST for businesses such as – expand consumer base, take advantage of schemes like composition tax payer etc. Thereafter, highlight the steps suggested by GSTN and its overall impact.
Conclusion – Discuss the overall impact of GST on MSME and suggest way forward.