Betting on growth for more revenue generation needed to take additional burden on government finances, coming from the 7th Pay Commission and increased pension payouts, Finance Minister Mr Arun Jaitley said he would reach out to the Congress Party for the crucial reform of GST.
Addressing captains of the industry at the ASSOCHAM 95th Annual General Meeting, the Finance Minister said he has “no difficulty” in reaching out to the Congress Party for its support for the constitutional amendment bill on goods and services tax. However, its suggestions should not lead to a flawed architecture and he would urge the principal opposition party to reconsider its position.
He described suggestions such as mentioning the tariff rate in the constitution itself as “preposterous”. Besides, the Congress party’s suggestion on changing the dispute architecture under the proposed GST council is also not sound. He said none of these suggestions were part of the bills moved by the earlier finance ministers – Mr Pranab Mukherjee or Mr P. Chidambaram.
The finance minister made these observations just days before Parliament is scheduled to meet for the winter session with the industry expecting passage of the GST constitution amendment bill.
On the issue of increased financial burden that will result from implementation of the seventh pay commission at a time when the economy is facing challenges of low investment and subdued global demand, Mr Jaitley said his mantra is to get one or two extra percentage points in the GDP growth. This would also give protection to the Indian economy from the fast changing and difficult global environment marked by geo-political situation with the rise of ISIS and the terror threats.
He said given the kind of challenges facing the economy despite India doing better than others, the government would need a popular support that hurdles are not created in the reforms process.
He said India of 2015 is not the India of 1990s, it is not only the middle class but also an aspirational India which wants growth and larger opportunities. “Those who stall reforms must realize that their number is smaller” (than those who support the progressive agenda).
Listing out various steps taken by the government in the recent past he said, the banking faces a major challenge that are being addressed through steps like package for discoms.
On the issue raised by the industry on threat of cheap imports of steel from China, the finance minister said that the government has already intervened twice but it will reexamine the surge in the inflows.
The finance minister said that real index of ease of doing business is “when captains of the industry stop coming to north block. That is the high point of the economy.”
He expressed satisfaction that a large number of states are now competing with themselves to attract investments. On specific problems of sectors like real estate, the finance minister said that states would be advised to cut down the red tape and reduce the number of clearances required for the projects.
In his address ASSOCHAM president, Mr Rana Kapoor said that despite global challenges there is a positive energy visible among Indians and the same is being harnessed by the Narendra Modi government with a focused approach on implementation.