Keep GST Below 20% For Inflation To Be In Check: Arvind Subramanian To NDTV

PUBLISHED ON: August 4, 2016 | Duration: 21 min, 50 sec

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On The Buck Stops Here, Chief Economic Adviser Arvind Subramanian talks of the "thrilling and hair-raisingly inspiring" experience of being part of GST history. "Revenue Secretary and I shook hands and hugged each other (when the bill was passed)," he said. On inflationary consequences of GST, he said, "If it's kind of within the 20% range, the impact on aggregate inflation and especially in terms of the impact on the poorer sections will be negligible." He also said it was not a big issue whether the rate is capped or not.

Highlights

  1. Standard GST rate depends on policy choices.
  2. Inflation will be higher at 24 per cent rate than at 20 per cent. One should choose a rate that doesn't lead to inflation.
  3. If GST rate is kept within 20 per cent, impact on inflation will be negligible.
  4. GST rates should be kept moderate in the long run.
  5. I will not recommend capping of rate. It is not a big issue if the rate is capped or not.
  6. Fixing the rate is kosher, democratically speaking.
  7. GST council will decide on cesses. As Chief Economic Adviser, I would want cesses to subsume in GST. Cess should be subsumed for simplicity's sake.
  8. Meeting the April 1, 2017 deadline for GST is doable, the commitment is there.
  9. States' anxiety over GST rate is understandable. With GST, we're entering uncharted waters.
  10. The GST timetable is challenging, it's tight.
  11. It is absolutely hair-raising to be part of the GST process.
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