Recent Tax Reforms in India: A Review of Policy Implications and Financial Market Impact

The study critically evaluates the recent tax reforms in India including the implementation of the Goods and Services Tax (GST), reduced corporate tax rates, and the introduction of a dual personal income tax regime. It aims to evaluate how these reforms impact tax compliance, economic development, transparency, fiscal stability, investment patterns, and financial markets.

A comprehensive analysis of theoretical frameworks and empirical evidence related to India’s tax reforms has been employed. It includes sector specific evaluations for understanding the broader implications of tax policy changes and examination of the role of these reforms in promoting economic formalization.

The analysis reveals that while recent tax reforms have contributed to improved tax efficiency and economic formalization, questions remain regarding their effectiveness in ensuring long term revenue generation and macroeconomic stability. The sectoral impact of these reforms varies, indicating a need for more targeted policy measures.

The study suggests that for achieving sustainable outcomes, tax laws should be simplified further, the digital integration of tax administration should be strengthened, and compliance systems should be enhanced without imposing an excessive burden on taxpayers.

The study provides a critical and balanced assessment of India’s evolving tax system. It contributes to the policy discourse by offering actionable recommendations for enhancing tax governance while maintaining fairness and economic efficiency.