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The trade-off between
immediate political gains and long-term economic gains
can be put in stark terms: The net present value of
introducing GST could exceed half a trillion dollars,
Finance Commission head Vijay Kelkar estimated in an
October speech.
But a discussion paper by the empowered committee of
state finance ministers released on Tuesday suggests the
overdue GST roll-out will fall short of the ideal.
The discussion paper is strangely silent on the most
pressing issues of discussion. Key sectors such as real
estate and electricity are missing in the document.
Petroleum will be excluded from GST while natural gas,
oddly, is still up in the air. No specific rates have
been set, and a bunch of short-term and state-specific
political compromises haven’t been resolved.
The signs are ominous.
Source :
Livemint,
India,
dated
11/11/2009
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