"Also, in a society like India where you still have a significant population which is deprived or below the poverty line, a single (GST) rate can't work," Jaitley said at "India-Korea Business Summit" here.
He said that being the reason, the government started with multiple rates and was now moving towards rationalisation.
"In the first stage of rationalisation process, we are thinning out the 28 per cent bracket. After we have thinned the 28 per cent and are able to improve compliance levels, then the second stage of reform of further consolidating other rates would begin - with two rates merging into one," the Finance Minister said.
Inviting delegates from South Korea to invest in India, Jaitley said India would continue to remain among the fastest growing economies in the world.
"India has demonstrated that even in a global environment of adversity, it has the potential to continue to reform, to take difficult decisions and maintain a high trajectory growth," he said.
Jaitley added that a seven to eight per cent growth rate was the normal expectation of Indians who believe the actual potential for Indian economy is much higher.