The Goods and Service Tax (GST) gets a support from a person who has closely seen the country’s economy. Chief Economist and senior vice president, World Bank, Kaushik Basu lauded the single tax structure on Monday saying that GST will be the biggest benefit for Indian growth and it will help cut down transaction costs. He even believes that GST will provide such a boost to the nation’s economy that it would surpass China in growth rates.
Basu feels that the benefits of GST can counterbalance price hikes in national market. GST has long term benefits which paved the way for short term goals such as controlling skyrocketing of market price. However, the Rajya Sabha has passed the constitutional amendment bill, which would lead the way for GST from April 1, 2017, though the GST rate is yet to be finalised.
“GST, which is supposed to cut down the transaction cost and double taxation at different point will make India into a common market and this can give a big fillip to India’s growth rate in the long run,” Basu said on the sidelines of the Arijit Mukherji Memorial Lecture at the Indian Institute Of Management – Kolkata.
He said that people may get concerned about its effect on market price, which is not known till now. But those would be a one-time effect. The long run effect would be beneficial for Indian economy.
He further said that he did not have immediate inflation figure as his organisation does not calculate such figures. “What I am stressing is the immediate long term effect is hugely positive of this kind of reform,” Basu added.
He said that the government should take the advantage of this GST for making a rule, that no truck can be stopped in the midway for collecting taxes except at the starting point or at the end. This will speed up the movement of the goods from one end of nation to other.