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
  • Standard GST rate depends on policy choices.
  • 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.
  • If GST rate is kept within 20 per cent, impact on inflation will be negligible.
  • GST rates should be kept moderate in the long run.
  • I will not recommend capping of rate. It is not a big issue if the rate is capped or not.
  • Fixing the rate is kosher, democratically speaking.
  • 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.
  • Meeting the April 1, 2017 deadline for GST is doable, the commitment is there.
  • States' anxiety over GST rate is understandable. With GST, we're entering uncharted waters.
  • The GST timetable is challenging, it's tight.
  • It is absolutely hair-raising to be part of the GST process.
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