The impact of goods and services tax on Indian economy will take time, results will not be visible overnight, according to Bibek Debroy, chairman of the Economic Advisory Council to the Prime Minister.
Noting that GST is a work in progress, Debroy said that when it was introduced, there were people who said the new indirect tax regime would lead to incremental gross domestic product growth of 1.5-2 percent.
"This is regarding the fact that the estimate was done by NCAER (National Council of Applied Economic Research) for the Ninth Finance Commission for terminal ideal GST, whereas GST—which is work in progress—may take 20 years. It is not that you are going to get 1.5-2 percent (additional) GDP growth overnight," he said on Monday.
India's GDP growth rate fell to an over six-year low of 4.5 percent in the second quarter of 2019-20. GST collections have remained mostly below the target.
GST collections stood at Rs 95,380 crore for October, down 5.29 percent from Rs 1,00,710 crore for the same month last year, according to government data.
This was the third consecutive month when GST collections remained below the Rs 1 lakh crore mark, despite the festive season.
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