Committing to “many more reforms”, a top finance ministry official today said implementation of the goods and services tax (GST) will bring small and medium enterprises (SMEs) into the national value chain.
“The government is aware that many more reforms need to be taken. After implementation of GST, it should be easier for SMEs to become part of entire national value chain… Next challenge would be how to make SMEs part of global value chain,” Economic Affairs Secretary Shaktikanta Das said at The Economist India Summit 2016 here today.
Dubbed as the biggest tax reform in India, GST will subsume most indirect taxes such as excise duty, service tax and VAT. The Constitutional Amendment Bill for GST was passed by Parliament on August 8.
The government is planning to roll out the indirect tax regime from April 1, 2017. While the Centre has to draft CGST and IGST laws, the states will have to come up with an SGST law.
Das, who attended the G20 summit in China earlier this week, said: “I can tell you with confidence that the kind of reforms which India has undertaken has been very widely appreciated by G20 countries.”
The secretary, however, warned against any room for complacency.
Das spoke of his discomfort with the theme of the panel discussion — ‘Holdup India? Speeding up policy reforms’ — arguing that the government instead has taken a host of initiatives and there is nothing which is holding up reforms.
“There are a number of measures which have been taken, please look at the huge amount of reforms. And GST, which had been pending for the last several years, has been passed by Parliament. The Aadhar Bill is the biggest fiscal reform which India has undertaken,” he said.
The secretary noted that by and large the overall thrust of the government policy is minimum government, maximum governance. “In a large number of areas, the government has reduced interventions,” Das claimed.
On FDI liberalisation, Das said the kind of steps the government has taken in the last one year has basically put everything on automatic route, except some sectors that are on the negative list.
“In Foreign Investment Promotion Board (FIPB), we have no application practically. Because everything is happening in the automatic route,” he stressed.
The secretary also pitched for improving the quality of primary, secondary and technical education in the country.