GST would help reduce government's fiscal slippages: Gokarn
31 Mar 2012
The implementation of the Goods and Services Tax (GST) would help reduce government fiscal slippage and thus boost growth, the Reserve Bank of India said yesterday.
According to Subir Gokarn, deputy governor of the country's central bank, the implementation of the GST would be a ''critical reform'' to catalyse growth and ''help contain government finances.''
''It will help to take that (deficits) off the demand pressures that we have seen contributing to inflation over the last couple of years and in effect create space for interest rates to come down,'' he told an event in Mumbai.
The GST would increase revenues on a sustained basis for the government, thereby limiting slippages, he added. The tax, would come into effect from April 2013, rationalise indirect taxes, and help in the removal of price distortions from multiple taxation under the current system.
He also stressed the importance of the government's finances in reducing interest rates.
He added, dealing with inflation, was important for returning the country to the path of high growth.
