Economy

GST will boost growth: Kaushik Basu

Abhishek Law Kolkata | Updated on January 17, 2018

Kaushik Basu, Chief Economist & Senior Vice President, World Bank, to deliver Arijit Mukherji Memorial Lecture, at IIMC, in Kolkata on Friday. – Ahoke Chakrbarty

GST will be the biggest benefit for Indian growth and it will help cut down transaction costs, said Kaushik Basu, Chief Economist and Senior Vice-President, World Bank, here on Friday. He urged the government to seize this opportunity to make truck movement faster.

According to him, GST implementation can lead to faster movement of goods within the country without trucks being stopped at check-posts for various tax collections. However, a risk remains of some “some toll and charges” collection being done mid-way.

It is for the government to ensure unobstructed and free inter-State movement of trucks.

“I would suggest that the government, taking advantage of this legislation (GST), make it a rule that no truck can be stopped.... except at the starting point or at the end. This will speed up the movement of goods,” Basu said.

“We have to make a fetish of efficiency and bureaucratic cost being cut down. And this (GST) is a step towards that,” he added.

The long-term of benefits of GST will far outweigh the short-term impacts like price hikes, if at all there is one, he pointed out.

“By cutting down of transaction costs 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,” he said on the sidelines of the Arijit Mukherji Memorial Lecture at the IIMC.

“The short-run effect — I know people get immediately concerned about what will be the effect on prices. I don’t know what will be the effect (on prices). But that’s a one-time effect. The long-run effect is extremely beneficial,” he said.

When asked whether he was one of the contenders for the RBI Governor’s post, Basu said, “No comments”.

To a specific question on whether he has met government officials, Basu said: “Not on this trip”.

GDP numbers credible

Basu also said India’s GDP calculation as “transparent” and “extremely dependable”.

According to him, some re-basing has been done and value added in the corporate sector. . But such calculation and data collection to arrive at the GDP figures are done in a extremely transparent manner.

“I’m on the whole positive about India’s GDP numbers. Conceptually there is some lack of clarity and you can raise some questions. It is above board in terms of cleanliness of the process,” he said.

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Published on August 05, 2016
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