Noting that Goods and Services Tax (GST) is a work in progress, he said that when it was introduced, there were people who said the new indirect tax regime would lead to incremental GDP growth of 1.5-2 per cent.
The impact of GST on growth will take time and results will not be visible overnight, according to Bibek Debroy, Chairman, Economic Advisory Council to the Prime Minister (EAC-PM). Noting that Goods and Services Tax (GST) is a work in progress, he said that when it was introduced, there were people who said the new indirect tax regime would lead to incremental GDP growth of 1.5-2 per cent. “This is regarding the fact that the estimate was done by NCAER (National Council of Applied Economic Research) for the ninth Finance Commission for terminal ideal GST, whereas GST — which is work in progress – may take 20 years. It is not that you are going to get 1.5-2 per cent (additional) GDP growth overnight,” he said on Monday.
India’s GDP growth rate has fallen to an over 6-year low of 4.5 per cent in the second quarter of current fiscal. Collections under the GST, which was introduced in July 2017, has remained mostly below the target. The GST collections came in at Rs 95,380 crore in October, down 5.29 per cent from Rs 1,00,710 crore in the same month last year, as per government data. This was the third consecutive month when GST mop-up remained below the Rs 1 lakh crore mark, despite festival season.
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