India should start with a uniform low rate GST

gst rollout

Vijay Kelkar, one of India’s most eminent economist and policymaker, delivered the fifth C. D. Deshmukh Lecture organized by National Council of Applied Economic Research. Speaking on Reflections on the Art and Science of Policymaking Kelkar made a case for promoting a competition driven market economy in India.

Kelkar cautioned that benefits of competition and reforms can be seriously compromised if governments and policymakers fail to ensure that there are no market failures.

This, Kelkar said, requires building state capacity to design effective incentives and balance pros and cons of policy interventions.

State capacity, Kelkar added, should be built step by step by tackling easy objectives first.

Citing the GST as an example, he argued that it is better to build a single, low rate GST first, and move on to more complex high rates and multiple rates later. He stated that India needs to build independent institutions and encourage an atmosphere of debate and dissent to improve policymaking.

Livemint, 03 February 2017

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