PM Modi: GST rollout in 2016, climate in India conducive for investment
Dated 7th October, 2015
PM Narendra Modi has expressed hope that the Goods and Services Tax (GST), which is stalled in Parliament following a logjam in the monsoon session this year, will be rolled out in 2016.
“We have introduced the GST Bill in Parliament and we are hopeful on rolling it out in 2016,’’ the Prime Minister said while outlining measures taken by the NDA government to improve the investment climate in the country at an Indo-German business summit hosted by Nasscom in Bengaluru on Tuesday.
Apart from German Chancellor Angela Merkel, who is on an official visit to India, the audience included top Indian business leaders such as Azim Premji, Kumaramangalam Birla, Chanda Kocchar and A M Naik.
The PM’s line was echoed in New York by Finance Minister Arun Jaitley who told students and faculty at Columbia University that the government’s “roadmap for the coming months (is that) GST will be a top priority”.
According to a PTI report, Jaitley blamed the Opposition Congress for stalling the passage of the GST Bill in Parliament. “This was more or less a political positioning rather than a serious ideological opposition because the (previous Congress-led) Manmohan Singh government had initiated the idea of the GST,” Jaitley was quoted as saying.
The government had set the stage for a possible rollout of GST next April by introducing the Constitution Amendment Bill in Parliament during the budget session. The Bill, which has been approved by the Lok Sabha is, however, pending in the Rajya Sabha, where the ruling NDA does not have a majority. Once it clears Parliament, half of the state legislatures need to approve the Bill.
Implemented in over 140 countries, the rationale behind the switchover to the GST is that it is a simplified indirect tax regime with a single tax instead of multiple duties, thereby widening the tax base, improving compliance and plugging leakages.
In Bengaluru, Modi also stressed on the current climate in India being conducive for investment in various sectors.
Indicating that state governments were also keen on improving the business environment, Modi said: “Provincial governments have entered into a healthy competition among themselves to ensure that transparent, predictable and user friendly regulatory mechanisms are quickly put in place.”
Referring to the introduction of 100 per cent FDI in railways, 49 per cent in defence and insurance and FDI policies for the construction and medical devices sectors, Modi said, “We are aware that our domestic financial resources are not sufficient to make our dreams therefore we have encouraged flow of foreign investments.”
The NDA government has “fast tracked approvals and clearances for industry and infrastructure’’, he said, adding that transparent allocation of resources like spectrum and coal had shown that a level playing field had been created.
“There were a number of regulatory and taxation issues adversely impacting the sentiments of foreign investors. We have taken many decisive steps to remove a number of concerns of investors,’’ Modi said at the Indo-German ‘Digitizing Tomorrow Together’ summit.
“We have expedited security and environment clearances, we have increased validity period of industrial licences, we have delicenced a number of defence items and liberalised a number of descriptions like end user. We have increased the validity period of defence industrial licensing upto 18 years from three years,’’ he said.
(This article is published in The Indian Express on 7th Oct, 2015)