Equirus Securities has outlined a sweeping tax reform agenda as the centrepiece of a 20-step roadmap for India to reach a $20 trillion economy by 2036, according to a report released on Sunday, 16 August. The brokerage argues that rationalising taxes across fuel, investment income, corporate bonds, and equity markets could meaningfully lower financing costs, reduce compliance burdens, and accelerate capital allocation across the economy.

Bringing Fuel Under GST

Among the most consequential proposals is the inclusion of fuel under the Goods and Services Tax (GST) framework at an 18 per cent rate. Equirus estimates this single measure could unlock approximately ₹5.5 lakh crore across the broader economy by streamlining the input tax credit chain currently broken by fuel's exclusion from GST.

The brokerage projects that logistics costs — presently around 9 per cent of non-services GDP — could fall to roughly 7 per cent, adding 0.3–0.4 percentage points to annual economic growth and generating an estimated export gain of around $60 billion. However, the report acknowledges a significant fiscal trade-off: the move could result in an estimated annual loss of nearly ₹1.6 lakh crore in net central excise revenue, a cost the Centre would need to absorb or offset.

Deepening the Corporate Bond Market

Equirus has also flagged India's underdeveloped corporate bond market as a structural drag on growth. India's corporate bond market currently stands at roughly 18 per cent of GDP, a stark contrast to the equity market's 130 per cent of GDP — and far below comparable emerging-market peers.

The report argues that bringing the tax treatment of bonds and equities closer to parity would incentivise institutional and retail participation in debt markets. Matching China's level of bond-market development, according to Equirus, could create around ₹54 lakh crore of additional financing capacity. Lower borrowing costs from a deeper bond market could deliver direct savings of nearly ₹2.2 lakh crore annually for borrowers — equivalent to 0.63 per cent of GDP before multiplier effects — with economic multipliers potentially adding 0.9–1.3 percentage points to growth.

Cutting TDS on Investment Income

A third pillar of the reform agenda targets Tax Deducted at Source (TDS) on investment income. Equirus has proposed reducing TDS to a flat 5 per cent, with any remaining tax liability settled at the time of filing returns rather than at source.

The brokerage estimates this change could release approximately ₹13.4 lakh crore of working capital back into financial markets — capital that is currently locked up in advance tax deductions and refund cycles. This liquidity injection, the report argues, would meaningfully improve capital efficiency across households and businesses alike.

The Broader $20 Trillion Roadmap

The tax proposals form part of Equirus's wider 'India's Road to a $20 Trillion Economy' report, which spans 20 reform areas targeting structural bottlenecks in capital markets, infrastructure financing, and regulatory architecture. The report frames tax rationalisation not as a revenue-neutral exercise but as a growth multiplier — one where short-term fiscal costs are offset by compounding gains in investment, productivity, and export competitiveness.

With India's nominal GDP currently tracking near $3.5 trillion, reaching $20 trillion by 2036 would require sustained real growth well above current trajectories, making the depth and quality of capital markets a critical variable. Whether policymakers act on these recommendations — particularly the politically sensitive fuel-GST inclusion — will be a key test of reform ambition in the years ahead.