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Should Tide Over Hurdles In 3-6 Months: Arvind Subramanian On GST Launch

NEW DELHI:  Hours ahead of the midnight launch of India’s greatest tax reform that replaces a bunch of central and state levies with a single indirect tax, the government’s chief economic adviser Arvind Subramanian on Friday rejected suggestions that the launch should have been deferred by a few months later to let the business community prepare better to make the switch.

In an exclusive interview to NDTV, Mr Subramanian said there was no perfect time to implement the new tax regime and there wouldn’t be a world of difference in the level of preparedness even if it was implemented three months later. The government’s top economist also accepted there would be teething problems for the first few months and some short-term pain was inevitable.

Some states including West Bengal and opposition have accused the government of rushing through with implementing the Goods and Services Tax (GST). On Friday, Congress vice president Rahul Gandhi joined the chorus and claimed the government had pushed through with a reform with great potential “in a half-baked way with a self-promotional spectacle”.

“There’s never a perfect moment,” Mr Subramanian insisted, pointing that one just had to take the plunge and there were going to be teething problems. The advantage of a credible deadline is that it just forces people to get to speed with preparation, he said, suggesting that once people got the sense that the deadline was credible, the preparations picked up pace in the last 2 to 3 weeks.

“I expect that over time, in 3 to 6 months we should tide over these challenges,” he said.

The new tax regime that has been in the works for more than a decade will be launched at a formal function at parliament’s central hall. Mr Subramanian called it a landmark achievement that will help transform a fragmented economy to one market, boosting investment and growth.

Looking back, the key government adviser conceded that there had been times when he too doubted if the ambitious tax regime would see the light of day. “We have all been doubters all along,” he said, with a smile.