Introduction
Arvind Subramanian, who served as the chief economic adviser (CEA) to the Indian government, has left the North Block with a mixture of relief and disappointment. In a candid interview, he revealed that he would have texted Piyush Jaitley ten times if he could, expressing frustration over the implementation of the Goods and Services Tax (GST). His remarks, reported by Business Today, shed light on the internal challenges that have shaped India’s tax reform journey. This article unpacks Subramanian’s exit, the GST saga, and the broader implications for India’s fiscal policy.
The exit from the North Block
Subramanian’s departure marks the end of a turbulent three‑year tenure. While he oversaw several macro‑economic initiatives, his relationship with the finance ministry grew strained, especially after the GST rollout in 2017. The former CEA described the environment as “politically charged” and highlighted the difficulty of reconciling technical economic advice with the realities of coalition politics. His decision to step down was framed as a move to make way for fresh perspectives, yet the underlying tension with senior ministers, particularly former finance minister Piyush Jaitley, was unmistakable.
GST: expectations versus reality
When GST was introduced, it was billed as a unifying tax structure that would simplify compliance and broaden the tax base. Subramanian initially supported the reform, but he soon grew disillusioned as the system faced multiple glitches, frequent rate changes, and a steep learning curve for small traders. He noted that the “original design” was compromised by political compromises, leading to a fragmented slab structure that hampered the intended ease of doing business.
| GST slab | Current rate (as of Dec 2025) | Revenue contribution (% of total GST) |
|---|---|---|
| 5 % | 5 % | 12 % |
| 12 % | 12 % | 28 % |
| 18 % | 18 % | 45 % |
| 28 % | 28 % | 15 % |
Jaitley’s role and Subramanian’s frustration
The former finance minister, Piyush Jaitley, was instrumental in shaping the GST legislation. Subramanian’s comment about “texting Jaitley ten times” reflects a deeper frustration with the pace of policy adjustments and the lack of technical dialogue. He argued that frequent amendments—often driven by political considerations—undermined the stability needed for businesses to plan long‑term. This tension exemplifies the classic clash between economic rigor and political expediency.
Implications for future tax reforms
Subramanian’s departure and his outspoken critique may serve as a catalyst for re‑evaluating India’s tax architecture. Analysts suggest that a streamlined slab system, clearer compliance guidelines, and a stronger interface between technocrats and policymakers could restore confidence. Moreover, the episode underscores the necessity of insulating economic advice from short‑term political pressures to ensure sustainable fiscal reforms.
Conclusion
Arvind Subramanian’s farewell to the North Block reveals a stark reality: even well‑intentioned reforms like GST can falter without cohesive execution and mutual respect between economists and politicians. His candid reflections highlight the gaps that still exist in India’s tax regime and point toward a need for more pragmatic, data‑driven policymaking. As the nation moves forward, the lessons from this episode could shape a more resilient and business‑friendly fiscal landscape.
Image by: Czapp Árpád
https://www.pexels.com/@czapp-arpad-3647289
