Indian business braces for disruption amid massive reform

New Delhi : India is bracing for upheaval as it storms ahead with its most ambitious reform in decades -- transforming the world's fastest growing major economy into a single market for the first time.

The long-awaited goods and services tax (GST) rolls out Saturday even as businesses complain they are ill-prepared for the massive changes about to ripple through India's unwieldy, $2 trillion economy.

The government promises the new regime will not just simplify trade by replacing more than a dozen levies with one tax, but combat corruption and enrich state coffers by bringing the informal economy into the digital era.

Most economists agree the reform -- first proposed in 2006 -- is necessary and long overdue, but warn the initial shock to the economy is likely to drag, rather than stoke, growth in the short term as businesses adjust.

There are already signs the transition could be rocky. 

Industries are on strike, others are facing an avalanche of paperwork, while some retailers remain unclear about what to charge just days before the taxes take effect.

"There are different rates for a mobile set, charger and headphones -- all of which come in one box," said Praveen Khandelwal, secretary general of Confederation of All India Traders, pointing to one such example.

"What tax rate will be applicable in such a scenario? We don't know yet."

It took more than a decade to get the GST through parliament and political bickering over the particulars now means there are four tax rates instead of one as originally envisioned.