Formalising the Informal through GST: Evidence from a Survey of MSMEs

Sangeeta Ghosh

Review of Development and Change, 2022, vol. 27, issue 2, 150-169

Abstract: In this study, the processes and channels through which an indirect tax reform has impacted micro, small and medium enterprises in India are identified using a field survey of small businesses. The Goods and Services Tax introduced in 2017 in India has been a significant departure from the past to impact businesses and business practices in a way that introduces formal practices into the everydayness of small businesses. This study shows that established informal mechanisms have been disturbed, which has led to coping mechanisms that have borne adverse outcomes for small businesses and workers involved in them. The benefits from such a move have been rather limited for small businesses. This study advocates that the quest to transition from an informal to a formal economy is one where many small steps must be first identified, and necessary handholding and training for the vulnerable units must be provided for inclusive development.

Keywords: Informal sector; MSMEs; informal labour; GST; indirect tax reform; formalisation (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations:

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/09722661221130138 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:revdev:v:27:y:2022:i:2:p:150-169

DOI: 10.1177/09722661221130138

Access Statistics for this article

More articles in Review of Development and Change
Bibliographic data for series maintained by SAGE Publications ().