Economics
Fear of the Taxman Blights Modi's Quest to Expand Formal Economy
- India’s small businesses are reeling from demonetization, GST
- Avoidance of taxation scutiny drives companies to avoid sales
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Twice in the past year, Mohammed Mohsin’s textile design business was buffeted by major changes in the Indian economy. First, a ban on high-value notes, then a new tax system. Now, he senses yet another threat.
“There’s a new fear,” says Mohsin, 33, one of half a million people plying the saree trade in Varanasi, in the heart of Prime Minister Narendra Modi’s political constituency in the northern state of Uttar Pradesh. “It feels like the government is watching every move.”