Claims of 1.5 per cent increase in GDP rate due to GST is rubbish: NITI Aayog member

While the Narendra Modi government at the Centre is making tall claims about benefits of the Goods and Services Tax (GST), NITI Aayog member and noted economist Bibek Debroy today rejected the claim that the GST would increase the Gross Domestic Product (GDP) growth rate by 1.5 per cent.

Bibek Debroy said, “There are talks that the GST would increase the GDP growth rate by 1.5 per cent. This is total rubbish.”

“Such speculations are based on the assessment of the 13th Finance Commission, which gave that figure for an ideal GST. We are nowhere near an ideal GST,” he added.

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When pointed out that Finance Minister Arun Jaitley and Finance Secretary Hansmukh Adhia have too stated the same, the famous economist said, “I won’t contradict them.”

But, the figure was put forth by the 13th Finance Commission and that too for an ideal GST, he informed.

Bibek Debroy also refuted the claim that there are around 150 countries in the world having GST. He said, “There are talks that 140 countries or 160 countries in the world that have GST. This is rubbish.”

“There are many countries in the world have VAT, Value Added Tax. A VAT is not GST. The number of countries having GST is 6 or 7, not more than that,” Debroy said adding “Except one all are unitary. The only country in the world which is federal and has GST is Canada. India is only the other federal country in the world to have GST.”

Debroy said that Indian GST is not an ideal one because of its federal nature. He pointed out that the setting up of a GST Council to finalise tax rates was compromise forced by the federal structure of the country.

The noted economist termed the multiple tax rates as the biggest problem of the GST. He blamed it on the apprehensions among the various states on the count of revenue loss.

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