ALONG THE ANGLOSPHERE:

Late on Aug. 3, after a debate lasting almost eight hours, Indian lawmakers approved plans for a major economic overhaul to turn the country into one unified market in which businesses can trade goods and services across state lines without having to navigate a prohibitive array of federal and local taxes. In what has been billed as the most significant reform since India opened up its economy in 1991, the measure is aimed at sweeping away a maze of levies that have hampered economic growth by making it harder for businesses to expand nationwide. Instead, the idea is to introduce a single tax system that would allow, for example, freight trucks to move quickly across India, rather than spending hours idling at multiple checkpoints filling in forms and making tax payments when they travel between states.

By simplifying the system, India, already the world's fastest-growing large economy, could see growth rise by as much as 2%. The successful passage of the so-called Goods and Services Tax (GST) bill is a big win for Prime Minister Narendra Modi, who has been criticized for not doing enough to reform India's economy since he came to power in 2014. Here is what you need to know about the landmark reform.

 

India's current tax system has long been recognized as a major drag on the economy. Plans to simplify the process were first mooted more than a decade ago, and the first GST bill came before Parliament in 2011, when Modi was still a regional leader. It was his Bharatiya Janata Party (BJP), then in opposition in New Delhi, that blocked the law proposed by the Congress Party-led government. But the tables were turned in 2014, when Modi led the BJP to power and the Congress began opposing the measure. More than two years of political bickering followed before the Congress, which found itself increasingly isolated on the issue as the BJP won the support of regional political parties, finally relented this week.

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