‘GST was a gamechanging reform’

that GST had a positive impact on the business. Revenue collections are confirming that formalising is helping the collections. The last figure available is of April, around ₹94,000 crore, but over last five years, 7.1% of annual indirect taxes is collected in April. If you extrapolate to an annual figure we are far going to exceed our receipts target (in 2018-19). To my mind, as and when we get an opportunity, we will reduce rates further. If any right-sizing or simplification has to be done in the process, we will do that.

So directionally, would it be accurate to say your approach will be fewer slabs and lesser rates?

I’ve not yet applied my mind to the fewer slabs, but lesser rates on many items, I do feel there is potential.

But if you think simplification is required, does it make sense to have so many slabs?

You must appreciate that different products have a different end market. India is not a country where everybody has a high standard of living so that we can have a mid rate of tax for everything as suggested by leaders of the opposition. The same parties’ leaders speak in a different voice in the GST Council. It’s unfortunate that we are trying to politicise a success story here. Collectively, all parties have worked together for this success. A product which is going to be used by millionaires and billionaires should have a high rate of tax and a product which is going to be used by the poor should have a low rate of tax. I think this is the worst form of bourgeois capitalism when people suggest there should be one rate. We will continue to have different rates. We will continue to tax the rich. And we will ensure that the poor and middle class of this country gets relief...

The question wasn’t about one tax rate but maybe fewer than you have now. You now effectively have at least five. Three would make business easier, wouldn’t it?

It’s a tax which is barely a year old, subsuming 40 taxes and cesses. We have to continuously monitor what’s happening and the progress in collections. Based on that it will evolve based on how it can be best administered for the benefit of the people of India.

The GST Council is among the best examples of cooperative federalism...

Absolutely.

What has been your experience working with the states?

Excellent. The good part is that in the Council, all parties have worked as a team, risen above political considerations, or a myopic view. I must acknowledge the contribution of all state finance ministers and governments. It’s a collective effort.

The Centre has also given up its right to fix tax rates and cesses. We have also put into the pool — maybe far more than anybody else. But it’s been in the spirit of cooperation. It’s been in the spirit of equality. Everybody had an equal voice and say in the Council. And no big brotherly approach has been taken. Inside the GST Council, we are by and large keeping the larger interest of the nation in mind and ensuring commonality of objective. Outside, let the politics take care of itself.

Petrol, real estate, liquor, what’s the thinking on those?

I think with an open mind all these issues will be considered by the Council.

Are you thinking of bringing aviation turbine fuel and gas under GST first?

That’s for the Council to decide.

But these are things you are open to?

The good part of PM Modi and his thinking is that we have never closed the door to debate , discussion, ideation. We like to look at new and innovative ideas on a continuous basis. In the Council, we will be open to all suggestions.

Moving away from GST, I have to ask you about the rupee. And oil. Are you worried?

The US has sanctions on Iran. The US is putting pressure on countries that buy oil from

Iran. OPEC (Organization of the Petroleum Exporting Countries) reduced production. And the global economy is recovering so demand is rising. It’s elementary (why crude prices are going up). As regards the rupee, in 2013 the rupee touched 68-69 (per dollar). Raghuram Rajan, the then governor of RBI (Reserve Bank of India), tempered the situation by introducing FCNR(B) accounts, through which banks were able to raise $32 billion. That brought the rupee down. In the Modi government, we increased forex reserves from $303 billion to $425 billion but also paid back that $32 billion. That has been the strength in the Indian economy and the improvement in the macroeconomy that the world has recognised. Currently there is a situation where the US has increased rates, there is a money flow, or rather a fear that people have that money will flow back to the US. There’s an international geopolitical situation with a trade war erupting. Oil prices have risen in the past three months. All of this has caused a temporary situation (in the forex market). I am sure RBI is on top of things. This phenomenon is something we are watching. But effectively in our regime there has been no depreciation. But this kind of volatility has to be watched and in an organised market we can only have an organised response. We cannot have a knee-jerk one.