Former Union Finance Minister P Chidambaram on Thursday asked Narendra Modi if the government’s Chief Economic Adviser Arvind Subramanian was also stupid after the prime minister mocked the Congress’ demand that the Goods and Services Tax rate should be capped at 18%.
Modi had criticised Congress leader Rahul Gandhi on Wednesday on his campaign trail in Gujarat for the suggestion. It was a “grand stupid thought” by “a recently emerged economist”, the prime minister had said.
In an address at the ICFAI Institute of Higher Learning in Hyderabad last week, Subramanian said the 12% and 18% tax slabs may be merged into one in the future, Mint had reported. “I am confident that over the next six-nine months the system will stabilise,” Subramanian said. “Then, over time, the 12% and 18% rates can probably be collapsed into one rate. So, over time, we will see fewer rates.”
However, Subramanian added that there might not be a single rate as that would be too difficult to achieve.
Has PM read the CEA’s report on Revenue Neutral Rate? Did not CEA recommend an RNR of 15-15.5%?” Chidambaram asked in a series of tweets. “Why can’t the normal GST rate be 15% and RNR plus rate on luxury goods be 18%?”
“Tax and spend is the credo of the BJP government,” the Congress leader said. “Example: when crude oil prices fell by 50%, prices of petrol and diesel remained the same.”
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