India needs to become a low-cost manufacturing hub to ensure success of the Make in India scheme, finance minister Arun Jaitley said on Saturday.
“If Make in India has to succeed, we actually have to become a low-cost manufacturing hub and I think there are several global factors which collectively are suiting us,” he said at the 57th National Cost Convention here.
The finance minister said as far as the services sector is concerned, India unquestionably has the potential to become a low-cost service provider in the world.
Lower commodity and oil prices and rising cost of wages in China has placed India back in competition, he said. “The world has never seen this kind of low price regime and India as a net buyer benefits from this low price regime…it is extremely important at this junction we fully make use of this global situation,” Jaitley said.
He said though everyone wants best goods and services at the cheapest rate, but factors such as poor infrastructure, capital and lack of proper trade facilitation add to the cost of goods and services.“To cut costs, both at micro and larger levels, there are a lot of improvement and changes required in any system,” Jaitley said.
Speaking separately at The Economic Times Global Business Summit, Jaitley said he hoped that Congress will see the benefits of Goods and Services Tax and help in passage of the Constitution Amendment that will enable the rollout of the indirect tax reform. “It is the important reform of the UPA government, if I had to credit the authorship of it, I have to give credit to them. Now If the author turn against his own script, how do I make….I have reached out, I have spoken to them, I have visited them, I have explained to them and I hope they will see the reason…the rationale behind passing GST,” he said. Jaitley said all political parties are with the government on economic legislations except the Congress.
“On all economic legislations, it has never been a BJP versus all. In fact, this government has been so gracious with the states that every regional party which may be supporting us or may not be supporting us, has normally supported all our legislations,” he said.
“So when the mining law was passed, coal law was passed, when GST was being discussed, it is from the BSP to Samajwadi to AIADMK, Trinamool to BJD, JDU, NCP have been supporting it because we have been gracious in sharing this revenue or proceeds with all the states. There is a single regional party which is against us, even in coal mine law, mining law and GST law, Cong stands alone without even its allies,” he added.
When asked if the government had been late in reaching out to the Congress on GST, Jaitley said, “I don’t think that is factually correct because session after session we are speaking to them. Initially when the bill was introduced, they said not this session, the next session and then suddenly after two-three sessions those three new objections came.” The Constitution Amendment Bill for GST is awaiting passage in the Upper House of Parliament, where the government does not have a majority.
The Bill was expected to be tabled in the Winter Session but was met with opposition from the Congress which has set three conditions to give its support to the bill. Congress has demanded a cap on the GST rate in the Constitution, removal of the proposed 1 per cent additional tax on inter-state movement of goods and setting up a judicial panel to adjudicate disputes among states.
Jaitley said it would be good if Constitution Amendment for GST is passed with consensus. “…it is very good to have laws passed by consensus and a law like this, which impacts taxation structure of India, being passed by consensus that is our preference, otherwise it can be put to vote,” he said.