With the Chinese economy slowing down, finance minister Arun Jaitley on Wednesday said that India has the opportunity to become a global manufacturing hub but once again regretted that the Congress party was not permitting the roll out of the goods and services tax (GST) that could boost GDP growth by 1-2 per cent.
Targetting 8 per cent growth this fiscal, Jaitley also expressed hopes of a good harvest as “rain Gods have been kinder this year”. The government is also taking a number of steps to boost investments as well as reviving stalled projects and infusing more capital into public sector banks.
“If my friends (Congress), who are not present in House today, allow the implementation of the GST, a proposal which was first mooted by the UPA Government in 2006 and consistently supported by them…India itself will be one market. The result will be that it is capable of boosting the economy between one and two per cent,” Jaitley said while replying to the debate on the first supplementary demand for grants in the Lok Sabha amid a boycott by Congress and a number of other opposition parties.
The government’s deadline of April 1, 2016 for the introduction of the indirect tax reform is unlikely to be met with the Constitutional amendment Bill for GST still stuck in Parliament. Terming India as one of the bright spots in the global economy, the minister further said that could take over China’s place as the global manufacturing hub. “We are at a situation where we are this year likely in an adverse global situation, if we can touch 8 per cent growth rate, or we can aspire to touch 8 per cent growth rate, if these economic measures are allowed, stalled projects take up, GST is implemented, banks are recapitalised, infrastructural spending improves….,” he said.
India grew at 7.3 per cent last year and RBI has projected this year’s growth to be 7.6 per cent. Noting that external factors are now reasonable towards India, Jaitley stressed that some green shoots of recovery are now appearing. “One of those green shoots is in the area of indirect revenue as far as the Central government …the indirect taxes in the first quarter have risen by a phenomenal 37 per cent,” Jaitley said, adding that the additional levies due to the fall in the global oil prices are being transferred on to infrastructural development, rural roads, railways and National Highways.
The minister also noted that capital expenditure has risen by 17.6 per cent in the first quarter of the fiscal.
‘Rising NPAs in steel, roads, power’
New Delhi: Responding to concerns over rising bad loans of public sector banks, finance minister Arun Jaitley said these are largely in the sectors of steel, highways and power. “Some factors are external which we are trying to resolve. Some like highways were entirely internal, some like power sector were purely internal. Steel has suffered because of several external factors which we are trying to resolve,” he said, adding that these will be slowly resolved and the government is now recapitalising state run lenders. ENS