Outgoing Chief Economic Adviser Arvind Subramanian on Wednesday ruled out a single rate for Goods and Services Tax and pitched for a three-tier structure going forward as revenues stabilise, PTI reported.
He said the GST is a “work in progress” and there is a need for simplification of rates with fewer exemptions and simpler policies. “In India, we can never have one rate,” Subramanian said. “I had recommended a standard rate and one for demerit good, one for low rate. I think in India the debate should be about why can’t we have three rather than one,” he said at the India Policy Forum 2018, organised by The National Council of Applied Economic Research in Delhi.
The GST regime has four tax slabs – 5%, 12%, 18% and 28% – and 3% percent tax on gold and other precious stones.
“I think over time we will see simplification,” Subramanian said. “For example, once the revenue stabilises, 28% can [go].”
Subramanian also said the implementation of GST, Insolvency and Bankruptcy Code, and effective public provisioning of private goods such as toilets and banks accounts have been key achievements of the government, reported The Indian Express.
While pitching for private ownership of banks, Subramania also said it is difficult to amend the Bank Nationalisation Act because of political reasons. The legislation bars the government from reducing its stake in PSU banks below 51%.
Subramanian had announced in June that he would leave the Finance Ministry soon and return to the United States “on account of pressing family commitments”.