Gandhinagar, January 11: Union Finance Minister Arun Jaitley said on Wednesday that the implementation of the Goods and Services Tax (GST), coupled with the impact of demonetisation can give a formidable push to India’s growth rate.
Incidentally, the statement by FM Jaitley comes on the day after World bank and Fitch reduced India’s growth outlook for the current year. Fitch Ratings downgraded India’s growth outlook to 6.9 percent for the year 2016-17 from last estimate of 7.4 % on grounds of “uncertain” benefits of demonetisation to Indian economy.
“The digitisation of economy that happened following demonetisation, which, subsequently, will lead to expansion of formal economy, and GST — both these factors have the capacity to boost economy and increase the growth rate,” Jaitley said here.
“I hope we will be able to see their impact this year only,” he added at the conference on ‘GST: The Game Changer for Indian Economy’ organised as a part of the ongoing Vibrant Gujarat Global Summit 2017.
The GST council is yet to get a consensus on critical issues of dual control and cross-empowerment and the FM hopes that these issues get resolved over the next few weeks.
“GST Council is deliberative democracy in action. Most of the issues have been sorted. Some critical issues remain and I hope… they will be sorted out,” Jaitley said.
When GST merges all the taxes and makes India into one entity, it’s an advantage to the assessee as there will be no cascading effect of tax and will lead to larger revenues for states, he said.
The next meeting of GST Council is scheduled on January 16, to discuss the critical issues of dual control and cross empowerment which deal with the assessee jurisdiction.
Talking about the inconvenience caused to various sectors because of the current cash crunch, he said difficult decisions initially pass through difficult phases and the real impact of demonetisation would be felt after this transient inconvenience. “It can have temporary transient pain attacks, but in medium and long term, the roadmap on which the country is destined to move can change,” he said.
However the Finance Minister did not lay light on the lack of access of infrastructural support for digitalisation in the country.