Barely two weeks ahead of the Budget, a NITI Aayog member on Tuesday sounded a note of caution to the government against the passage of the Goods and Services Tax (GST) Bill in a hurry.
The government think tank NITI Aayog’s member Bibek Debroy suggested that a wait was worth if India needed a “good” GST. He said this at an industry event.
“On GST, I think a question we need to ask ourselves whether we want a good GST? And, if we want a good GST then a strong case can be made on what is the great hurry?,” Debroy said apparently cautioning the government against succumbing to the Congress demand for a constitutional cap on GST rate, scrapping of state levy and an independent dispute mechanism for revenue sharing.
Debroy’s comments came at a time when the prospects of passage of the GST Bill in the upcoming Budget session have become further bleak. The Congress maintains that the government has made no efforts to build bridges on GST after the Winter session .Coupled with that the imposition of President’s Rule in Arunachal Pradesh has not gone down well with the Congress.
Finance Minister Arun Jaitley, however, had recently said the Congress should see reason and ensure passage of GST in the Budget session.
But Debroy suggested that the government should now concentrate on amending land and labour laws while preparations on bringing a good GST should be on.
His views on the GST are slightly different from the recent remark of NITI Aayog’s Vice Chairman Arvind Panagariya who said GST was moving in a right direction.
But Debroy has always held that amending the Constitution each time the GST rate has to be changed is not doable.
“The GST is the beginning of a process. Any country that has implemented the GST or an equivalent of the GST has seen that with a period of time, because the inefficiency gets weeded out, there is an increment of 1-1.5 per cent to the GDP growth,” he said.
On the pressing problem of non-performing assets of the banks, Debroy said that it was mainly because of the debt-driven infrastructure sector loans