PM asks states to remove inter-state trade barriers
To make a beginning, he asked ten northern states to go slow on fiscal incentives for industry, suggesting swift improvement in tax systems and free trade.
Worried about the disparate economic growth in these states, which had been trailing the national average, he said, “The largest barriers to trade have been our tax systems. Tax systems have been put in place which act as hindrances. Tax breaks and shelters have been created to facilitate development of backward regions. Physical controls through permits and checkpoints increase transaction costs for commerce. When the whole world is moving towards dismantling barriers to trade and promoting trade facilitation, it is imperative that states in India too realise that these policies —which may be driven by revenue or development concerns — will not pay off in the long run. I am told that free flow of trade can add up to 2% to state growth rates across the region.”
Singh was addressing the chief ministers' conclave, organized by PHDCCI, here.
Assuring the CMs of the region that the Centre would “be a partner in progress”, Singh said his government was committed to helping the region.
Singh observed human resources needed to be backed by top-class infrastructure. “You must take advantage of the national urban renewal mission to change your urban landscape and make your cities modern, productive and attractive.” He said
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