Interacting with audience at the release of his book "Of Counsel: The challenges of Modi-Jaitley Economy" in the national capital on Sunday, Subramanian said: "The GST was certainly not a failure, but it could have been more along the lines of what I had initially recommended; maybe some of the challenges might have been marginally diminished. I can say it frankly, the budget has made unreasonable demands on GST. It asked for 16-17 per cent. However, to judge the GST by what the budget demands of it is unreasonable."
Despite demands being raised of introducing a single slab under the GST rather than four(present number of tax slabs), Subramanian was of the view that a single tax slab would not be the best way forward.
"The 28 per cent tax slab could have been avoided as states were already promised compensation on account of loss on revenue owing to the transition to GST. I feel there should be no more than three (tax slabs)- one core rate, one for essentials and one for luxury," he explained.
Subramanian, who is currently teaching at the Harvard Kennedy School, further observed that the country should brace itself for an economic slowdown, as financial conditions are "very tight" and not conducive to rapid growth.
Substantiating the possibility of a slump in growth, Subramanian said: "Europe is slowing down, Japan is slowing down, there are political calendars. I think to expect huge reforms that will perk up the economy at this stage would be somewhat ambitious. For the combination of all these reasons I think we should brace ourselves for a period of slowdown. Then we have to see what policy actions are taken, how external environment changes, then we can think about real perk up in the economy."
The recently-released Gross Domestic Product (GDP) data by the NITI Aayog had sparked off numerous debates, with the new data series being debunked by former finance minister P Chidambaram as a "bad joke".
Responding to the same, Subramanian said an explanation on the revised data was necessary, as the data series "raises many questions."
"This particular series raises many questions. If you look at the other indicators during that period (UPA), you see a big difference between those indicators and the recent back-series. It demands an explanation. This is a very technical subject, and we should have more technical experts examining it. It becomes a matter not just of the credibility of this data but the data-generating capacity of the state," he explained.
Earlier this year, Subramanian had stepped down as the chief economic advisor owing to "pressing family commitments."
Last week, the Centre appointed Dr Krishnamurthy Subramanian, an associate professor at the Indian School of Business (ISB), Hyderabad, as the new chief economic advisor for a term of three years.