'Govt may reduce GST slabs to three in the long term'

Kolkata: Principal economic adviser to the Ministry of Finance, Sanjeev Sanyal on Saturday discussed on various issues which are affecting the current economic trajectory of the country.

He was addressing at a special session on the 'Economics of Fuelling our GDP Growth' organised by Bharat Chamber of Commerce at its premises in the city on Saturday.

The country will reap the benefits through the implementation of major policies, opined Sanayal. In order to implement the 'maximum governance, minimum government' strategy, basic changes in the framework in various sectors of the economy are imperative, he stated while elucidating on the impact of the much debated reforms, demonetisation and GST in particular.

Commenting further on the impact of GST, Sanyal said: "We were not a unified economy to start with and it was easier for Mumbai to trade with Shanghai than with Delhi because of different levels of taxation. So GST was the only solution in the calling and the best thing to do was to implement it immediately otherwise it could have been debated for another 20 years.

While addressing the gathering he also admitted that many things have gone wrong but after continuous revisions make the taxation system works. Many things went awry like network failures and export refund issues but those complications are being resolved.

In regard to GST tax rates, Sanyal stated that the Central Government has to consider the revenue impact for each individual state prior to revisioning of tax rates. He also added that 12% and 18% may be clubbed into a central 15% tax rate which will account for a bulk of goods and the highest tax rate of 28% may come down to a 25%.