2017 GS Paper I, all questions

UPSC Prelims 2017 · GS Paper I

Question 81: Economy and Social Development

What is/are the most likely advantages of implementing ‘Goods and Services Tax (GST)’ ?

  1. 1.It will replace multiple taxes collected by multiple authorities and will thus create a single market in India.
  2. 2.It will drastically reduce the ‘Current Account Deficit’ of India and will enable it to increase its foreign exchange reserves.
  3. 3.It will enormously increase the growth and size of economy of India and will enable it to overtake China in the near future.

Select the correct answer using the code given below :

a1 only
b2 and 3 only
c1 and 3 only
d1, 2 and 3

AnswerUPSC’s answer is (a).

GST replaced a maze of central and State indirect taxes with one tax on the supply of goods and services, removing tax-on-tax and trade barriers between States, so India becomes a single national market. That makes Statement 1 right. GST is a tax reform and cannot by itself drastically cut the current account deficit or raise reserves, and no tax change can promise that India will overtake China soon, so Statements 2 and 3 are overclaims. Remember: GST's advantage is one tax and one market.

  • 1. GST subsumes many taxes and creates a single national market.
  • 2. A tax reform will not drastically cut the current account deficit.
  • 3. GST cannot guarantee that India overtakes China.

How you could have got this

  1. If you were sure statement 3 is not correct, (b), (c) and (d) go: each of them includes 3.

    What you needed to know: GST cannot guarantee that India overtakes China.

Only (a) is left. You didn’t need statements 1 or 2.

Which options go is worked out from UPSC’s key and the options, not by a model.

Why each option is right or wrong
  • (a) Right: replacing many taxes to make a single market is the likely advantage.
  • (b) Wrong: statements 2 and 3 are overclaims.
  • (c) Wrong: overtaking China (3) is not a likely direct result.
  • (d) Wrong: statements 2 and 3 are overstated.

Answer: UPSC’s key. Explanation: written by UPSC Grade, not by UPSC.

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Source: UPSC, Civil Services (Preliminary) Examination 2017, General Studies Paper I, Series A. The paper on upsc.gov.in.