GST Rationalisation Expected to Ease Working Capital Stress, Says Economic Survey 2026

The recently rolled out Economic Survey by Finance Ministry Nirmala Sitharaman has stated that rationalisation of the Goods and Services Tax is expected to ease working capital stress for businesses. The Survey explains that simplifying the GST structure will help reduce tax-related cash flow issues, especially for manufacturers and small businesses.

According to the Survey, the present GST system has multiple tax rates. This has led to problems such as accumulation of input tax credit and delays in refunds. Such issues often result in funds getting blocked, which affects the day-to-day operations of businesses.

The Economic Survey highlights that GST 2.0 introducing structural reforms will resolve inverted duty structures and improve working capital. The reforms are expected to improve liquidity for businesses. This would allow firms to use their funds more productively for expansion and investment.

The Survey also points out that easier compliance and better cash flow can encourage small businesses to formalise. Overall, the Survey emphasises that GST rationalisation can improve ease of doing business and support economic growth by easing working capital stress.

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