International Journal of Business Management & Research - Volumes & Issues - Volume 12: June 2022, Issue 1

Impact of GST Reforms on Healthcare, Banking, and Pharmaceutical- Sectors: An Empirical study via VAR Model Perspective

  • Published: June 2022
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Authors

Shubham Garg,Prof. Karam Pal Narwal,Prof. Sanjeev Kumar

DOI Number

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Keywords

Economic Impact; GST Reforms; Sectoral Indices; Impulse Response Function; Vector autoregressive model

Abstract

The current study aims to examine the impact of the GST reforms on the banking, pharmaceutical and healthcare sector of the Indian economy. The study has employed the monthly closing prices of NSE sectoral indices from January 2013 to December, 2021 as a representative to the selected sectors of the Indian economy. The finding of the study illustrates that the policy uncertainty due to the GST reforms negatively affect the banking sector by increasing the tax rates on financial services and interbank transactions from 15% to 18% under GST regime. The increase in tax rate has resulted in increasing the cost of financial services provided by the banking sector to its customers which directly affect their banking business in India as depicted by contemporaneous negative response in Impulse Response Function analysis. On the contrary, the adoption of GST has created an opportunity for the pharmaceutical and healthcare sector which has resulted in instantaneous positive response to both of these sectors. However, this positive response is wiped off in the short run within a time period of two months on an average for both of these sectors.

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Journal

International Journal of Business Management & Research

ISSN

2249-2143

Periodicity

Bi-Annual

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