GST best bet for states to improve finances: RBI

RBI has said, the introduction of Goods and Services Tax (GST) will have economy-wide ramifications and holds the best bet for state governments to improve their finances without cutting productive expenditure. 

The apex bank said this in its report titled, 'State Finances: A Study of Budgets of 2016-17'. It said, GST will have economy-wide ramifications in terms of growth, inflation, government finances and external



competitiveness over the medium-term.

Referring to the challenges, RBI said, GST implementation should be addressed through a robust dispute resolution mechanism and the Goods and Services Tax Network (GSTN) is expected to provide the necessary information technology (IT) infrastructure to all stakeholders.GSTN is the IT backbone of the country's largest tax reform which is scheduled to be rolled out from 1st of July.