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The Goods and Services Tax is beneficial to Kerala and though revenues in the new tax regime are expected to go up in the next six months, there is still a need to rationalise expenditure, economist Gita Gopinath said on Saturday.
"The expectation is revenues from GST will go up after six months. There is a considered expectation that when GST becomes normalised, the state will get more revenue," said Gopinath, the Harvard Professor and Financial Adviser to Kerala Chief Minister Pinarayi Vijayan.
Since Kerala is a consumption-driven economy, GST is particularly beneficial for the state, Gopinath told reporters on the sidelines of the 'Loka Kerala Sabha'.
So more revenues should be got, she said.
"But on the other hand, we will also have to make sure that expenses are kept in check. This is not just about getting more revenue, but you have to be careful about how expenditure is growing."
The expectation is a year or two this deficit will come down, she said.
"After six months, our expectation is revenue from GST will go up. But, still, there will need to rationalise expenditure," Gopinath said and added that will have to be the plan for the coming years.
Loka Kerala Sabha is a new concept of the state government envisaging cooperation toward the state's progress.
The Sabha will have 351 members including MLAs and MPs representing the state with 178 nominated members representing Kerala expatriates.