The Indian economy, which saw temporary disruptions caused by demonetisation and the roll-out of the goods and services tax (GST) over the past two years, will see consolidation in the current fiscal.
The Indian economy, which saw temporary disruptions caused by demonetisation and the roll-out of the goods and services tax (GST) over the past two years, will see consolidation in the current fiscal, finance minister Arun Jaitley said on Sunday. In a message to the CII annual session, Jaitley said reforms such as GST, Insolvency and Bankruptcy Code and new income tax regulations are contributing to a better investment climate. “An aspirational India, an impatient India, has accepted the idea of reforms,” the minister said in the message. Jaitley, who was supposed to address the event, couldn’t attend due to health issues. Speaking at the CII event, economic affairs secretary Subhash Chandra Garg said India is aiming to become a $10-trillion economy by 2030, from roughly $2.5 trillion now. He said four kinds of businesses would drive growth – those in manufacturing, start-ups, infrastructure and the small and medium scale sector. He said creating a conducive environment for businesses would rest on four factors: improving the ease of doing business by streamlining procedures and reducing cost of operation; ensuring a stable macroeconomic environment that would entail a stable rupee, benign inflation, adequate resources for the private sector and promoting FDI; access to credit at low costs to spur investments; facilitating skill development and simplifying labour laws.
CII president Shobana Kamineni stressed the need for widening of the tax base through lowering of the corporate tax, better allocation of resources and right pricing, and deregulation of labour laws. “We value the assurance of a red carpet but cannot live under fear that it can be pulled out from us at any moment,” she said. She added the industry needs to take risk and build new capacity and massive investment is required in the R&D space, investments in which currently account for just 0.3% of the GDP. Devolution of funds to states should be based on performance indicators: NITI Aayog NITI Aayog vice-chairman Rajiv Kumar on Sunday pitched for building ‘performance indicators’ for the devolution of funds to states, reports PTI. Kumar also said while fiscal irresponsibility is bad, “fiscal fetish” is also not desirable and a delicate balance has to be maintained. “I think it is clear that these (devolution of funds) criteria has to include some performance-based criteria. And therefore, those states which have done better in certain performance should not be punished. I think it is better deal now to start process of building some performance indicators for the devolution of funds and then increase it in phased manner,” Kumar said at the same event. Kumar’s observations come in the backdrop of some states expressing disquiet about the terms of reference of the 15th Finance Commission to decide the sharing of tax resources between the Centre and states. The NITI Aayog was in favour of recommending to the 15th Finance Commission to consider sustainable development goals performance for allocating a small percentage of funds to different states, Kumar said.