World Bank India chief Junaid Ahmad on Tuesday described GST as a “tectonic shift” in the country’s taxation policy which has increased the possibility of 8 percent plus growth.
India recorded a growth rate of 7.1 percent in 2016-17 and 5.7 percent in the first quarter of the current fiscal.
“Today India is at the brink of a possibility of moving into 8 per cent plus growth rate. Why? Because India has made a very bold step in integrating internally its nation into one market. So the shift into GST is a tectonic shift,” World Bank Country Head in India Junaid Ahmad said at an industry event.
If the Goods and Services Tax (GST) is implemented efficiently, the growth boost India will get is going to be huge, he said while addressing members of PHD Chamber of Commerce and Industry here.
The economic corridors of India will change and that will require change in transportation as well, he added.
“You (India) need systems of transport, particular multi- modal, in order to respond what GST is offering as one market.
If GST is implemented efficiently, the growth boost that you will get from internal movements of goods is going to be huge,” he said.
Part of it (growth boost) lies in the implementation of the GST but it also depends on how the country invests in logistics, he added.
Ahmad said if integration of India’s local markets are done correctly, the gains in next 5-8 years from the internal integration will outweigh those from global integration (of markets).
“And indeed the internal integration linked to your port system can change the nature of growth of India,” he added.
However, he said it was pertinent for India to have a highly professional service delivery mechanism in every sphere of life, be it the water system, electricity, railway or solid waste management system.
He said the optimal service delivery mechanism of basic infrastructure is one of the biggest challenges India faces today.