GST has two fathers and two mothers,nobody knows who is in charge

What has been your experience working in India as compared to other countries?

I thought it would be quite a challenge for all the states to come together for such an Act. But its truly an outstanding achievement; to do a joint act is quite a challenge politically. But they have done it. Even to this date,I dont think that this kind of consensus and such high degree of cooperation among states I have seen anywhere. But what is lacking at the moment is a focused effort to develop infrastructure for GST. And in some way,in my view,it (the GST) has become an orphan. It has two mothers and two fathers and nobody knows who has the charge. The states think the centre is doing,the centre thinks the states are doing,nobody does it in the end and not only that,when somebody does it,the other party starts saying why did you do this?

But the cabinet recently approved a computerisation project worth Rs 1,133 crore for implementing GST…

You do it but its a piecemeal approach. What computerisation? Computerisation by itself can not function. You need to have a supporting element. Start with the tax design. Even now they are debating how much should be the tax base and rate… if you had a secretariat dedicated for this,then you come to a common view. There is no debate or fight among the governments about what the rate should be. Should it be 10 or 12 per cent? It is the function of the secretariat. Dont expect the ministers to decide what should be the rate. Basically,it is the bureaucracy that has failed.

But even if we have a secretariat,how many states do you think would be ready to budge and give even an inch of their fiscal autonomy? How would you reach a consensus?

Most people think they would lose something. By keeping petroleum in GST,they dont lose anything. Rather its the economy that gains. You can still continue to levy duty on alcohol,above the GST rate. Its not a question of how many things should be included,its a question of giving full input tax credit and making the tax structure simple.

They (the states) have to give up nothing but unfortunately there has been no debate on this. You dont have to give up anything but design a better GST structure.

What do you think about the progress made so far in India as compared to that in other countries?

There are three dimensions to it. Political willingness to take on these issues is absolutely amazing. I have not seen any country where political parties of so many different types and colours would come together for such a thing. The second is thought leadership. In most of the country people dont have the same quality of thought leadership in conceving and designing such a tax structure. The credit goes to people like Kelkar,the PM and Chidambaram,who have the vision to see the impact this would have on the economy. But there is a resistance at the bureaucratic level but thats everywhere. The third thing,which is a negative,is that the process of planning and preparation is absolutely pathetic. Countries far less advanced do a much better job of planning than India.

Are the states actually working on the contentious issues?

Nobody comes prepared,finance secretaries and commissioners dont have time from their regular duties,how do you expect them to come prepared for GST? You have things falling between stones. Nobody is planning properly… there is no country where I have worked,where the clamour for GST is higher. I have heard no voice of dissent,which is amazing.

Even the private sector understands that they will gain from GST,unlike any other country. In Canada,we told the FM that you will lose your seat,so only touch it (the GST) if you are ready to sacrifice your power. But,in India,it is amazing.