CEA praises former RBI governor, rules out single GST slab

  • Outgoing Chief Economic Adviser Arvind Subramanian on 11 Jul 18 expressed scepticism over the handling of the mounting NPAs crisis as he praised former RBI governor Raghuram Rajan for identifying the lacuna and trying to resolve it, sources said.
  • Subramanian who appeared before the parliament’s committee on estimates, was not convinced that the NPA issue would be resolved within a year or two, as claimed by the bankers, sources said.
  • He raised apprehensions about the handling of the rising non performing assets (NPAs) and indicated that a lot needed to be done, a member who was present in the meeting said on the condition of anonymity.
  • Subramanian, the former economist at the International Monetary Fund (IMF) was forthcoming in his briefing to the panel and mentioned that the former RBI Governor was instrumental in identifying the problem, another member said.
  • He also appreciated Rajan for his efforts in tackling the crisis, the member added. He indicated that the decisions to approve big ticket loans by the public sector banks were influenced though he did not elaborate who and how the approvals were influenced, the member said.
  • Subramanian also said that there was an environment of fear among the bankers and they were reluctant to lend besides retail lending.
  • On GST, he said the Goods and Services Tax is a “work in progress” and there is a need for further simplification of rates with fewer exemptions and simpler policies.
  • Subramanian said since GST is a regressive tax, it won’t be “fair” to have a single rate structure unless there are instruments to protect the poor who get hurt by rising costs.
  • Besides, Subramanian also said that India needs an independent fiscal council which brings out independent views on how government does accounting for public finances.

External Link: https://economictimes.indiatimes.com/news/economy/policy/cea-arvind-subramanian-praises-raghuram-rajan-for-identifying-npa-problem/articleshow/64950255.cms

External Link: https://economictimes.indiatimes.com/news/economy/policy/india-cant-have-single-rate-gst-3-slab-structure-possible-arvind-subramanian/articleshow/64952714.cms