Former Chairman of the Economic Advisory Council to the Prime Minister C. Rangarajan has said there should not be too many slabs in the Goods and Services Tax (GST).
When asked about the predictions that the GDP growth rate would come down further, Mr. Rangarajan, who has also served as the Governor of the Reserve Bank of India, said it seemed that some of the specific problems triggered by the GST and demonetisation had “bottomed out.”
Ideally, there should not be too many slabs in the GST, he said, speaking to reporters on the sidelines of the convocation of the Bharathidasan Institute of Management here on Saturday.
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However, Mr. Rangarajan felt that the GST was an important reform and a change in the indirect taxes regime was much needed. “When such a big reform is introduced, there will always be some risk. These difficulties will be there. What is really needed is addressing the problems that have arisen. Attempts must be made to smooth out GST implementation,” Mr. Rangarajan said.
Stating that he had a feeling that the GST was gathering momentum, he said a situation might emerge in future when rates have to be lowered when the coverage widens.
On the scope of bringing fuel prices under the GST, Mr. Rangarajan said ideally, no commodity should be left out of the GST ambit. “Petrol and diesel should be brought under the GST net.”
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To a question on whether the reforms being carried out by the Narendra Modi government were up to the expectation, he said that reforms such as the GST and modifications in foreign direct investment norms were good. But reforms should be a continuous process. “In the area of governance, there are still many reforms to be made,” he observed.