Hyderabad: Even as the government has lowered its GDP estimates to seven to 7.5 per cent in 2015-16 from the earlier 8.1-8.5 per cent, industry body Assocham on Monday said that the passage of the Goods and Services Tax (GST) Bill would be critical for the revival of the Indian economy and pegged India’s growth estimates at eight per cent in the current financial year.
“While we were expecting things to calm down after Bihar elections and things started moving in a positive direction on GST, they now seem to be going haywire again. Even if a special session of Parliament is required or extension of the current session is needed, let the GST Amendment see the light of the day and the scheme roll out from the ensuing financial year,” said Sunil Kanoria, newly-elected president of Assocham.
He added that although there is a long way to go for a ‘Perfect’ GST, a ‘Good’ GST Bill should not be sacrificed at this point of time and the tax reforms must roll out from April 2016.
When asked about the impact of GST on inflation and small traders, Mr Kanoria said, “There might be a one to one-and-a-half per cent increase in inflation, if the GST gets passed. But this would actually benefit small traders as they will not have to pay multiple taxes and can easily get their goods transported without having to take expert advice on different taxes. It will become more convenient for such traders. If the GST comes in, then I would not be surprised if there is an increase of almost one to one-and-a-half per cent jump in GDP.”
He said quicker resolution of disputes through arbitration can bring back around Rs 5 lakh crore stuck in court cases. “There are many developers whose money is stuck due to contract disputes. It will come back to the system, if the disputes are resolved. Any uncertainty about dispute resolution will dent investor confidence,” he said.
In order to address unemployment problem, Mr Kanoria, who is also vice-chairman of Srei Infrastructure Finance Ltd, feels that the focus should be on entrepreneurship, which will eventually create jobs.
He said Assocham plans to “concentrate on job creators rather than job seekers which will happen via encouraging entreprenuers.” “The government has recognised that the entrepreneurship is the key channel to create employment opportunities. However, there are pain points experienced by entrepreneurs due to delay in permissions. Once these are eased, the confidence among the investor community will improve,” he said.
Reacting to the government’s decision against passing on lower petrol and diesel prices to consumers, the Assocham president that the reason for this is that the government believes that people are used to a certain level of prices and wants to use the difference amount for meeting the development expenditure.
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