Washington: Expressing confidence over the passage of long pending GST bill in Parliament, RBI governor Raghuram Rajan has told American investors the new regime will improve collections and broaden the tax base.
In an event organised by the US India Business Council (USIBC) in New York last week, Dr Rajan told American institutional investors that the priority for RBI is to clean up banks and their non-performing assets.
He said RBI’s continued focus on fiscal consolidation and inflation will mean that they will reach their targeted goals, a USIBC statement quoted Dr Rajan saying.
Dr Rajan observed the intention is to give banks more powers to allow for greater recovery of money and give relevant stakeholders an active role in the resolution process. During the interaction, the governor said he is optimistic about the passage of GST Bill and the opportunities for compromise that will help realise the goals of the GST — a unified tax market, improvement in tax collection and broadening the tax base, USIBC said.
Under this major reform, central and state taxes will get subsumed into GST, which will reduce the multiplicity of taxes, and thus bring down the compliance cost. With GST, the burden of Central Sales Tax (CST) will also be phased out.
Led by USIBC chairman Ajay Banga, the discussion focused on issues such as inflation, fiscal deficit management, recent rate cuts, monetary policy, deepening capital markets, modernising India’s capital markets.
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