GST is Only One Sixer in the Long Innings Ahead For India

The Wire, September 14, 2016


A refusal to change our traditional adversarial approach to governance has the potential to hold GST reform hostage. This should not be allowed.

Tharman Shanmugartnam, the erudite deputy prime minister of Singapore, delivering the first lecture in the NITI Aayog lecture on transforming India series recently. He asked the government to hit fours and sixes, using cricket terminology, to achieve faster transformation and growth. The goods and service tax (GST) bill, adopted with bipartisan support, is a step that can be counted as a six in terms of the movement for transformational reforms.

However, this is but one six in an innings where we need to make at least a century. Many more steps will be needed for the idea of an integrated national market, where goods can move seamlessly across various internal borders, and add at least 1% to our growth. None of them can wait for a decade to kick-in, as the GST did, neither can we afford to get stuck in political bickering or become hostage to vested interests. What are the next steps that desperately need to be taken?

Learn from past mistakes

India needs to design an implementation strategy for GST. We are known to spend much of our government’s precious available time in blocking, discussing and eventually passing laws, policies, programmes and schemes. There are copious examples of legislations being passed without estimating the increased burden it would mean on judicial and quasi-judicial authorities and making provisions for the same. Unfortunately, we do not accord equal importance to processes of design, implementation, challenges involved, generating awareness and building capacity. For instance, the Make in India programme is long on vision but short on strategy to deal with the impact of automation and disruptive technology. While cosmetic changes to improve rankings in ‘ease of doing business’ reports have been made, our interactions with stakeholders reveal limited improvements in practice.

Similarly, while states have set up single windows for clearances, multiple windows exist in the background and applications still travel to multiple departments. An entrepreneur still has to run from pillar to post to get things done and nothing moves without grease. One businessman tells us that 90% of his time continues to be spent on chasing babus, time he could have used gainfully in productive work.

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