A booster dose.

"The changes in the Goods and Services Tax regime is a double dose of support and growth for the nation and the next generation reforms have been done to support India's progress in the 21st century, Prime Minister Narendra Modi said." HT. GST rates were simplified to just two rates of 5% and 18% and "cut taxes on household essentials (soaps, toothpaste, Indian breads) to 5% or Nil boosting affordability." static. pib.gov.in.  Earlier, exemption limit from income tax was raised to Rs 400,000 for all individuals and to Rs 1.2 million for salaried individuals. ET. These changes are meant to stimulate growth in GDP by encouraging higher consumption, which is strange because, "Real GDP has been estimated to grow by 7.8% in Q1 (April-June) of FY 2025-26 over the growth rate of 6.5% during Q1 of FY 2024-25. Nominal GDP has witnessed a growth rate of 8.8% in Q1 of FY 2025-26." pib.gov.in. "The Indian economy keeps surprising analysts on the upside." It grew 7.4% in the Jan-Mar quarter and then by 7.8% in the Apr-Jun quarter. "Private Final Consumption Expenditure  (PFCE) improved by 7.2% in the last fiscal year." "Gross Fixed Capital Formation (GFCE), the best measurement of investment, rose by 7.12% in 2024-25 after achieving 9.4% the previous quarter. No sign here of a structural slowdown," wrote Swaminathan Aiyar. That then begs the question: if the economy is growing gangbusters why the frantic effort to boost growth by cutting both direct and indirect taxes at the cost of increasing fiscal deficit? "In most walks of life scale brings efficiency." But in taxation, "The bigger the spend, the higher the rate." "If you can afford more, you must pay more - not merely in absolute terms, but in rates. The stated goal is redistribution, but the outcome is often distortion: aspiration gets punished, growth is discouraged, and avoidance finds fertile grounds," wrote VK Mathews. If these tax changes are so dramatic, why are the stock markets unimpressed, asked Andy Mukherjee. "The main reason for the lack of enthusiasm in equity markets is that what is being sold as a reform is just a new rate card." It is not just the stock market, but "Rising bond yields and a depreciating currency." "Both reflect underlying market scepticism about the soundness of our macro fundamentals." Mint. No matter how hard the government tries, "Economist and fund manager Ruchir Sharma has said India will never achieve China-style double-digit growth, pointing to structural differences between the two countries and warning that freebies culture makes such growth impossible." BT. However, freebies are essential for winning elections. Hence, freebies are untouchable. And so, tinker with taxes.