Blaming demonetisation and the “ill-implemented” goods and services tax regime for the current economic slowdown, West Bengal Finance Minister Amit Mitra (pictured) on Thursday hit out at the central government for delaying GST compensation to states, claiming it has hurt their finances.
“It is not a cyclical correction but a structural slowdown. The demonetisation decision hit businesses across the country. A few months later, another blow came in the form of the ill-conceived GST rollout,” Mitra said in a press conference.
India’s GDP growth fell to 5 per cent in the first quarter of the current financial year and is estimated to have dipped further in the second quarter.
Mitra highlighted an increase in the cash in the economy and suspicious transactions after demonetisation, and how the badly implemented GST led to a rise in incidents of frauds, causing leakages.
Suspicious transactions reports (STR) increased 14 times in 2017-18, as compared to the year prior to demonetisation, he said citing government data. He said of over 1.4 million STRs received, only 82,595 were processed.
“GST frauds at least to the tune of Rs 1 trillion have taken place so far, if we include states’ data,” said Mitra. He said discontinuation of invoice matching through GSTR 2 had given rise to incidents of fraud.