After the Loksabha approval, the GST rollout looks imminent from July 1 and there are hopes that it will give a huge boost to economic activity in almost all sectors of Indian economy. Economic Affairs Secretary Shaktikanta Das has said that GST is an outcome of hard work done over last many years and it would remove the shadow economy. Das has also said that the tax net will be widened under the new regime and this may result in reduction of general tax rate.
Noting that GST is a very transformative piece of legislation, Das has said that it will definitely give a boost to the real economy at the expense of the parallel shadow economy and added that the indirect tax regime would also raise gross domestic product (GDP) growth by 1.5-2 percentage points.
Regarding revenue losses once the GST comes into place, Shaktikanta Das said that states might lose revenue in initial years, but the revenue inflows will stabilise even in the medium term and noted that he would not expect the revenue losses to continue beyond the first three years. He said that in any case if it happens, then there is a compensation mechanism for the first five years to compensate the states.