• Notification Date: 15-12-2023
• Notification No: N/A

GST Implementation though Initially Uneven, has Remarkable Benefits: Raghuram Rajan

Economist, former RBI Governor and Professor of Finance at the University of Chicago, Raghuram Rajan, lauded the government for the Goods and Services Tax (GST) and Unified Payments Interface (UPI). He said that even though the implementation of GST was uneven initially, now we can all see its benefits. 

Speaking at a podcast hosted by Akash Banerjee, on his YouTube channel ‘The Deshbhakt’, Rajan talking about certain landmark implementations, picked UPI and GST.  

“When you look at GST, so much was said about ‘we need it, we need it, we need it’ but was opposed during UPA time by some of the people who implemented it. We finally implemented it. Now we are seeing some of the benefits. The implementation initially was uneven, now we have started seeing the benefits. I think in the longer run, a unified country will be extremely good, and it is very commendable that this government brought in the Goods and Services Tax,” said Rajan. 

The GST was launched at midnight in 2017, marked by a historic midnight session of the Parliament. The session was boycotted by the Opposition who argued that the GST would lead to problems for the middle and lower classes as it could raise existing rates on common daily goods and reduce taxes on luxury products. After its implementation, the GST rate brackets have mee modified multiple times. 

Since then, the GST revenue collection for November 2023 has increased to nearly Rs 1.68 lakh crore, which is a 15% jump on an annual basis, crossing the Rs 1.6 lakh crore mark for the sixth time in FY24. Out of that, CGST was Rs 30,420 crore, SGST was Rs 38,226 crore, IGST was Rs 87,009 crore (including Rs 39,198 crore collected on import of goods), and cess was Rs 12,274 crore (including Rs 1,036 crore collected on import of goods). 

Moreover, the Finance Ministry is anticipating average monthly GST revenue collections for the upcoming fiscal 2024-25 to surpass Rs 1.7 lakh crore, on the back of a strong economy and increasingly better compliance. 

The economist also lauded UPI and called it a great success. He said that it started during his tenure at the RBI and now UPI has reached 10 billion transactions a month. “One of the most important structural features in UPI was that we let the non-banks in, which was an important contribution,” said Rajan.  

For the month of October, UPI saw 11.41 billion transactions, amounting to Rs 17.16 lakh crore.