As the Winter Session of Parliament began on Thursday, industry body Assocham appealed to the Opposition parties to help in the passage of GST bill as it can be a ‘brahmastra’ for India in challenging global times.
“Goods and Services Tax is a key ‘brahmastra’ for our GDP. Lawmakers across parties should pass the Constitutional Amendment Bill on GST without further delay,” the new Assocham President Sunil Kanoria said.
“This would send a strong signal to investors that India’s economy can overcome serious global challenges with political will,” he told reporters .
He said the economy was affected by demand slowdown, uncertain geopolitical situation after the Paris terror attacks, and an unprecedented crash in vital commodities.
“GST will harmonise indirect taxes by doing away with multiplicity of taxes. It will also reduce cost of production, which will be then passed on consumers, thus lowering inflation. More striking would be the display of a political unity and the will to rise up to national cause,” he said.
Timely implementation of GST would raise the GDP by 1.5 to 2 per cent, Kanoria said adding the Opposition should not change their earlier stance.
Talking about the country’s economic growth forecast, he said this fiscal, Indian economy is expected to register a growth of 7.2 per cent to 7.3 per cent.
“It will be below 7.5 per cent this year. In 2016-17, it may increase to about 7.5 to 8 per cent and 9 per cent in 2018-19. But it will depend on so many things,” he added.
Kanoria also said the stipulation of additional 1 per cent duty should not be imposed and the GST would help country to make “one India rather than divide India”.
He urged the Congress party to rise up to the national call and support the (GST) bill in Rajya Sabha.
“If the Congress party or any other national or regional party has some specific concerns, the government should look into the same and address it as far as possible. There can always be a middle ground,” he said.
Kanoria further said the critical challenge was to generate jobs for the one million Indians joining the workforce every month.
For that, he said, improving the ease of doing business, better infrastructure, affordable access to finance are critical steps.
On the issue of bank NPAs, he said: “We cannot afford to delay the full recapitalisation of banks while concerted efforts should continue to address the structural problems of the sector like steel, power, roads, highways where the maximum level of stress assets is locked up.”
In this regard, the bankruptcy law should be passed urgently and implemented so that assets locked in bad loans are released and given to new promoters, he added.
He also suggested for an empowered infrastructure dispute resolution mechanism.
When asked about increase in private sector investments, Kanoria said the government is taking steps to improve ease of doing business and it would help in boosting investments.
“Momentum has started. 2016-17 will be a marginally better year but I expect 2017-18 and 2018-19 will be good years,” he claimed.
On the government’s target of GDP growth for this fiscal, he said it will be difficult to achieve that target.
“First we have to clear the impact of economic tsunami. I am sure, India would start growing at higher rates… may be middle of next year, the growth will start,” he added.
Further, when asked about the need for a continuous dialogue between Prime Minister and the industry, Kanoria said Assocham sends its suggestions to the government on all relevant issues and also invite officials and ministers for interactions.
“(But ) yes, we have not been able to have that kind of regular audience with our Prime Minister. May be there is a perspective at this juncture that he needs to open up and create policy framework in the country.
“May be he is wanting to see that capital gets attracted into India. He is an excellent marketing man in marketing India so well. We would hope to have more interactions with him, we will continue to make our efforts,” he said.
On interest rate, he said the role of RBI Governor and the Finance Minister are like “Lord Vishnu and Goddess Lakhsmi. That is a kind of role and balance needs to be created”.
They have to take care of inflation as well as interest rates to attract investments, he added.