GST will help curb black money, says YV Reddy

The implementation of GST (goods and services tax) will help bring down black money in the country, according to YV Reddy, former Governor of Reserve Bank of India.

Replying to queries of students at the inauguration of the new building of MSNM Besant Institute of Post-graduate Studies in Mangaluru on Tuesday, Reddy said: “One of the main instruments through which you can curb black money is the implementation of GST.”

However, he said, everything, including those excluded in the present GST Bill, should be included in it. Everything has to be accounted for, if the GST is implemented across the country. There is incentive to account for everything, he said.

To another query on the impact of black money on public policy, Reddy said that black money comes from stock to flow. More the black money the effectiveness of public policy becomes less. If the public policy was good there was no way black money can come, he said.

Reddy said the solution lies in the public policy to some extent and the ethics of the corporates.

Black money cannot be generated unless somebody who gives and somebody who takes it.