Raghuram Rajan, economist, former RBI Governor, and University of Chicago Professor of Finance, praised the government for implementing the Goods and Services Tax (GST) and the Unified Payments Interface (UPI). He stated that, while the implementation of GST was unequal at first, we can now all appreciate its benefits. Rajan mentioned UPI and GST at a podcast presented by Akash Banerjee on his YouTube channel 'The Deshbhakt'.
"When you look at GST, so much was said about 'we need it, we need it, we need it,' but it was opposed by some of the people who implemented it during the UPA." We eventually put it into action. We are now beginning to notice some of the benefits. The implementation was initially patchy, but we are now seeing the benefits. "I believe that a united country will be extremely beneficial in the long run, and it is very commendable that this government implemented the Goods and Services Tax," Rajan added.
The GST was implemented at midnight in 2017, coinciding with a historic midnight session of Parliament. The Opposition boycotted the session, claiming that the GST will cause problems for the middle and lower classes by raising existing rates on common everyday purchases while lowering taxes on luxury items. The GST rate brackets have been changed several times since its establishment.
Since then, GST income collection for November 2023 has climbed to approximately Rs 1.68 lakh crore, a 15% increase year on year, surpassing Rs 1.6 lakh crore for the sixth time in FY24. The CGST component was Rs 30,420 crore, the SGST component was Rs 38,226 crore, the IGST component was Rs 87,009 crore (including Rs 39,198 crore collected on import of goods), and the cess component was Rs 12,274 crore (including Rs 1,036 crore collected on import of goods).
Furthermore, the Finance Ministry expects average monthly GST revenue collections for the fiscal year 2024-25 to exceed Rs 1.7 lakh crore, owing to a healthy economy and rising compliance.
The economist praised UPI and called it a huge success. He stated that it began during his term at the RBI and that UPI now handles 10 billion transactions each month. "One of the most important structural features in UPI was that we let the non-banks in, which was an important contribution," Rajan went on to say. UPI processed 11.41 billion transactions in October, totaling Rs 17.16 lakh crore.
