GST to boost Indian economy in long run, says World Bank chief economist Kaushik BasuBack to Index
Kolkata: Outgoing World Bank chief economist Kaushik Basu, who is believed to be in race for Reserve Bank of India governor's post, hails India's effort to implement Goods and Service Tax (GST) saying that the single tax structure would provide further boost to Indian economy which has recently overtake China in growth rate.
The upper house of Indian Parliament, the Rajya Sabha, passed the crucial constitutional amendment bill preparing the ground for GST implementation from April 1, 2017.
However, the GST rate is yet to be finalised leading to speculations on what would be the impact on general prices.
"I know people get immediate concerns of what will be the effect on prices, but that's a one time effect. The long run effect is extremely beneficial," Basu said in Kolkata.
"By cutting down of transaction cost and double taxation at different points, it will make India into a common market and this can give a big fillip to India's growth rate in the long run," the economist said, on the sidelines of an event at IIM-Kolkata.
GST would ensure free movement of goods across the country, as the country would be under a single tax structure, removing the layers of indirect taxation.
Basu said he is on a personal visit to India and he had not met government officials during this visit.
He refused to comment on questions related to Raghuram Rajan's likely successor at RBI. Rajan announced in June that he would not be seeking a second term after his stint as RBI governor ends in September.
He wished not to get into this contentious issue, but said that monetary policy has been very well conducted in India which, along with prudent fiscal measures and low oil prices, helped Indian economy to grow steadily.
Source: The Economic Times