Blaming demonetisation and the “poorly-implemented” goods and services tax regime for the ongoing economic slowdown, West Bengal Finance Minister Amit Mitra charged the central government for hindering the GST compensation to states and hurting their finances.
“It is not a cyclical correction but a structural slowdown. The demonetisation decision hit businesses across the country. A few months later, another blow came in the form of the ill-conceived GST rollout,” said Mitra.
India’s GDP growth dropped to 5 percent in the first quarter of the latest financial year and is estimated to be falling further in the second quarter.
Mitra underlined an allegedly wrongful inflation in the cash circulating in the economy and suspicious transactions post demonetisation, and how the poorly implemented GST created the menace of frauds, causing leakages.
Suspicious transactions reports (STR) grew by 14 times in 2017-18, in comparison to the year before demonetisation, he said, while citing government data. He said more than 1.4 million STRs received but only 82,595 were processed.
“GST frauds at least to the tune of Rs 1 trillion have taken place so far, if we include states’ data,” said Mitra. He said discontinuation of invoice matching through GSTR 2 had inflated the incidents of fraud