Structural reforms, rate easing and range-bound commodity prices are key for over 8 per cent GDP growth, the report said.
“The ongoing trends of structural reforms, cyclical easing of monetary policy by another 50 bps in the current fiscal and range-bound commodity prices would support India’s growth revival to over 8 per cent in FY17,” Citigroup said.
The report said implementation of GST will lead to a unified market across the country and a simplified tax regime, which could also help improve India’s ease of doing business ranking.
“While the extent of gain may be debated, GST implementation is likely to support the GDP growth revival to more than 8 per cent over the medium term (based on new series),” Citigroup said.
GST, which is proposed to be implemented from April 1, 2016, will subsume excise, service tax, state VAT, entry tax, octroi and other state levies.
Citigroup said GST is aimed to transform India into a unified market with a simple and efficient indirect tax structure.
As a result, domestic and international competitiveness of Indian manufacturing firms could improve and investment climate could revive.
“In terms of macro impact, the GST is likely to provide a boost to exports and GDP growth; also over a longer term the GST could be net accretive to government revenues,” it added.
The GST Bill, which was approved by the Lok Sabha, could not pass muster in the Rajya Sabha and was referred to the select committee for scrutiny.
The government proposes to roll out GST from April 1, 2016.