What is/are the most likely advantages of implementing 'Goods and Services Tax (GST)'? 1. It will replace multiple taxes collected by multiple authorities and will thus create a single market in India. 2. It will drastically reduce the 'Current Account Deficit' of India and will enable it to increase its foreign exchange reserves. 3. It will enormously increase the growth and size of economy of India and will enable it to overtake China in the near future. Select the correct answer using the code given below:

Let's evaluate the likely advantages of implementing the Goods and Services Tax (GST) in India:

1. It will replace multiple taxes collected by multiple authorities and will thus create a single market in India. This statement is correct. The primary objective and the most significant advantage of GST is to subsume various central and state indirect taxes (like excise duty, service tax, VAT, etc.) into a single tax. This simplification aims to eliminate cascading effects of taxes, reduce compliance burden, and create a unified national market, making inter-state trade smoother and more efficient.

2. It will drastically reduce the 'Current Account Deficit' of India and will enable it to increase its foreign exchange reserves. This statement is incorrect. While GST is expected to boost economic activity and potentially make Indian exports more competitive by reducing the cost of goods, claiming it will 'drastically reduce' the Current Account Deficit (CAD) or 'enormously' increase foreign exchange reserves is an overstatement. CAD is influenced by a multitude of factors, including global commodity prices (especially crude oil), global demand, and the overall balance of payments, which are not solely determined by a domestic tax reform.

3. It will enormously increase the growth and size of economy of India and will enable it to overtake China in the near future. This statement is incorrect. While GST is projected to positively impact India's GDP growth in the long run by improving efficiency and compliance, the claim that it will 'enormously increase' growth to the extent of enabling India to 'overtake China in the near future' is highly speculative and exaggerated. China's economy is significantly larger, and such a rapid convergence due to a single tax reform is unrealistic.

Thus, only statement 1 accurately describes a most likely and primary advantage of GST.