Evaluating the Impact of Goods and Services Tax on Human Development in India

The Goods and Services Tax (GST) was implemented in 2017 as a significant milestone in the reform of India's taxation system. It aimed to expand the tax base, improve revenue mobilisation, and enhance compliance by unifying indirect taxes. Although previous research has primarily concentrated on the impact of GST on tax collection efficiency and Gross Domestic Product (GDP), there has been a lack of attention devoted to its impact on human development. The objective of this study is to address this gap by evaluating the impact of GST revenue on the Human Development Index (HDI) across 28 Indian states from 2017 to 2023. The analysis incorporates key control variables, including population density, infrastructure investment, and education expenditure, using panel data regression models.  The results indicate that HDI is significantly positively impacted by GST revenue, with the Fixed Effects model being the most reliable. Furthermore, research indicates that infrastructure and education investments contribute to improved developmental outcomes, while population density remains negligible. The study's findings emphasize the transformative potential of GST as a fiscal instrument, provided that revenues are allocated effectively to infrastructure and human capital.