Letter to BS: Raghuram Rajan's statement on GST, growth has serious defects

This refers to “Excessive centralisation of power one of India’s main problems, says Rajan” (November 11). Former Reserve Bank of India governor Raghuram Rajan’s (pictured) lecture has serious defects. He has called the Goods and Services Tax (GST), a headwind for growth. He mentions “initial hurdles of implementation of GST”, which means he does not blame the GST itself. But still he calls GST a headwind. Can GST be implemented without initial hurdles? When the value added tax (VAT) was introduced in the UK, it was known as the most unloved tax. He has been a chief economic advisor in the International Monetary Fund (IMF) that actually sponsored VAT all over the world. IMF has helped in designing the GST. It has been lauded also by Kaushik Basu. All business houses have accepted it as the most modern and path-breaking reform. Trucks carrying goods are no longer detained for hours at states borders. Central sales tax has been abolished and that has benefited the interstate sales by 4 per cent. GST has made India a common market.
 

Regarding 7 per cent growth in India, he admits that it is “very very strong rate of growth” but calls it a new Hindu rate of growth. He cleverly doesn’t mention that it is the fastest rate in the world. About reform in banks, he said that there should be a multi-pronged approach. What is that approach? He does not say. If he knows what that multi-pronged approach is, why did he not introduce it when he was the governor? 

Sukumar Mukhopadhyay, New Delhi

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Letters can be mailed, faxed or e-mailed to: 

The Editor, Business Standard

Nehru House, 4 Bahadur Shah Zafar Marg 

New Delhi 110 002 

Fax: (011) 23720201  
E-mail: letters@bsmail.in
 

All letters must have a postal address and telephone number