Even though the Rajya Sabha cleared the Constitution (122nd Amendment) Bill, 2014 to introduce GST , former West Bengal finance minister Asim Dasgupta, who was also the chairman of the Empowered Committee of State Finance Ministers on GST, expressed surprise on the time taken to enact the legislation. However, he added that once the GST is implemented, it is likely to add 1.5 percentage point to India’s GDP annually.
“… this simply should not have taken so much time. I really can’t understand why it has taken so much time…,” Dasgupta told The Indian Express. He pointed out that even at the conceptual stage the Empowered Committee had taken cognizance of the shortfall that the states may have to face immediately after the implementation of the GST.
“It will pan out in the long run. But the time immediately after the Bill is implemented, the states should expect a shortfall. We had provided for complete compensation for the states up to a period of five years. This is something that the Centre needs to be careful about. ..,” he said.
Dasgupta said that the Bill should now be implemented immediately, by April 2017.
“… we should be careful that the eventual gain is shared both by the states as well as the Centre. We had consulted the National Council of Applied Economic Research and they had told us that a taxation policy such as this is likely to add 1.5 percentage point to the economic growth rate of the country. This will of course depend on rates that are finally decided. But it is possible to give a major push to the economy through the GST,” he said.