17.8        ndian      onom
     surely alter our understanding of the economy19.                      firms in the private non-agriculture sector
     Data from the GST can help unveil some long-                          but 93 per cent of their total turnover.
     elusive and basic facts about the Indian economy.                     As per the Survey, the above-given list is a
     As per the Economic Survey 2017-18 , some                             mere sampler, giving a hint of the insights
     exciting new findings include:                                        that analysis of the GST will be able to
              A large increase in the number of                            provide in the future—a whole new world
              indirect taxpayers has been noticed;                         has indeed opened up and much exciting
              many have voluntarily chosen to be part                      new research lies ahead.
              of the GST, especially small enterprises
              that buy from large enterprises and want               coMModiTies TransacTion Tax
              to avail themselves of input tax credits.
              The distribution of the GST base among              The Union Budget 2013–14 has introduced
              the states is closely linked to their Gross         (basically, reintroduced) the Commodities
              State Domestic Product (GSDP),                      Transaction Tax (CTT), however, only for non-
              allaying fears of major producing states            agricultural commodity futures at the rate of 0.01
              that the shift to the new system would              per cent (which is equivalent to the rate of equity
              undermine their tax collections.                    futures on which a Securities Transaction Tax is
              New data on the international exports               imposed in India). Alongwith this, transactions in
              of states suggests a strong co-relation             commodity derivatives have been declared to be
              between export performance and states’              made non-speculative; and hence for traders in the
              standard of living.                                 commodity derivative segment, any losses arising
                                                                  from such transactions can be set off against income
              India’s exports are unusual in that the
                                                                  from any other source (similar provisions are also
              largest firms account for a much smaller
                                                                  applicable for the securities market transactions).
              share than in other comparable countries.
              Internal trade is about 60 per cent of                   Like all financial transaction taxes, CTT
              GDP (even greater than estimated by the             aims at discouraging excessive speculation, which
              Economic Survey 2016-17) and compares               is detrimental to the market and to bring parity
              very favourably with other large countries.         between securities market and commodities market
                                                                  such that there is no tax/regulatory arbitrage.
              India’s formal sector non-farm payroll
                                                                  Futures contracts are financial instruments and
              is substantially greater than currently
                                                                  provide for price risk management and price
              believed. Formality defined in terms
                                                                  discovery of the underlying asset commodity /
              of being part of the GST net suggests a
                                                                  currency / stocks / interest. It is, therefore, essential
              formal sector payroll of 53 per cent of the
              non-agricultural work force. However,               that the policy framework governing them is
              it stands only at 31 per cent in terms of           uniform across all the contracts irrespective of
              social security provisions.                         the underlying assets to minimise the chances of
                                                                  regulatory arbitrage. The proposal of CTT also
              Similarly, the size of the formal sector
                                                                  appears to have stemmed from the general policy
              (defined here as being either in the social
                                                                  of the government to widen the tax base.
              security or GST net) is 13 per cent of total
                                                                       Commodities Transaction Tax (CTT) is a
       19.  Economic Survey 2017-18, Vol. 1, Ministry of Finance, tax similar to Securities Transaction Tax (STT),
            N. Delhi, pp. 32-42.
                                                                  proposed to be levied in India, on transactions