Hailing the passage of the GST Bill, World Bank Chief Economist Kaushik Basu today said any immediate "price jerk or inflation" would be a one-time affair, but the tax reform's long-term growth benefit will be immense.
"People are talking about price concerns, but the immediate price impact is a small concern, positive or negative, but the biggest impact of the GST is the long-term benefit through cutting down of transaction cost," Basu said.
He was speaking to reporters on the sidelines of the Indian Institute of Management, Calcutta-organised Arijit Mukherjee Memorial Lecture.
"The GST will cut down transaction cost and double taxation at different points and it will make India a common market. It will give a big fillip to the growth rate in the long run," the outgoing World Bank chief economist said.
When asked about his name doing the rounds for the post of RBI Governor, he declined to comment.
Regarding GST, Basu said he does not have any answer to whether there will be any impact on inflation as the World Bank does not do those calculations.
For faster movement of goods as envisaged in the Bill, Basu said that the government should make a rule not to stop trucks midway but only at start or end points for taxes.
He said that India is already the fastest growing major economy in the world with about 7.5 per cent growth projection for 2016.
He said that both monetary and fiscal policies have been well executed in the country, aided by low oil prices paving the way for growth.
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