GST rollout, launch in India: Infosys Co-Founder N R Narayana Murthy today said India should not be worried about the perception of foreign investors on GST regime, but hoped the respect for the country will improve in their eyes once they realise that the system is hassle-free.
GST rollout, launch in India: Infosys Co-Founder N R Narayana Murthy today said India should not be worried about the perception of foreign investors on GST regime, but hoped the respect for the country will improve in their eyes once they realise that the system is hassle-free. “I don’t think India is very high on the radar screens of most nations.That is the reality, but this initiative will reduce hassles for anybody who wants to operate in India.” “Once they start their operations in India then they will realise that this system is comparable to what they have experienced in developed nations. So then their respect for India will improve,” Murthy told PTI. He said there may be more (global) investments coming in and they would be much more enthusiastic to participate. “That is how I look at it. I don’t think we should worry whether some foreigner is saying, this is good or bad,” he added. Asked what GST means for India in economic terms globally if the country boosts its GDP by two per cent ahead of China, he pointed out that China has the second largest economy in the world, whose GDP was four times that of India.
“Therefore I don’t think we should lose time in boasting about ourselves vis a vis China. That is not necessary, but we have to work harder and enhance our GDP growth rate and make the country stronger in terms of public infrastructure and defence, among other things.” To a query, he said it is true that government had not included certain GDP-driving commodities like petroleum products, but that he would rather look at the issue with the ‘extraordinary tenacity’ Prime Minister Narendra Modi has shown in making this happen. “It was very easy to say let us postpone by another year, but he didn’t do that. He and the Finance Minister said we will implement it. I would like to take that view frankly.” Asked if he sees taxes falling due to GST implementation in future,Murthy said the new tax system would help government collect data on various products, which would allow it make ‘zillions of analysis’ and enable it to get huge insights into the tax regime to make taxation easier and simpler.
On the demand from various sectors, including solution providers, to postpone GST implementation as they are not ready, Murthy said “I often used to say ships are safe at harbours but they are not meant to be there. They have to go into the high seas. Face storms and reach the comfort of a desirable destination. Hence let us not needlessly worry about possible problems.” He suggested setting up of rapid reaction warranty teams to attend to problems with utmost alacrity on 24/7 basis. “This is a must whether it is in the U.S., U.K., Japan, Australia or China, so I am not frankly that much concerned because life is full of problems, but we have to make progress in spite of the problems,” Murthy said. He hoped GST would bring many people into the fold of the formal economy as it is very easy to follow and comply.
More than anything else, the poor are likely to benefit more from GST as more people moving into the formal sector will bring in additional revenue, which could be utilised to provide better facilities to workers at small firms,he said. Asked to comment on predictions that the success of GST would bring the Narendra Modi government back to power,he said “I am apolitical, therefore I don’t attach any political significance to what any government does – whether at the central or the state level.” “All I would look at is whether any initiative taken up by any government is going to make life of our citizens better. And I am convinced that GST is one of such initiative which will make the lives of citizens much better. That is all I am worried about,” Murthy said. He said he firmly believes that the GDP would experience additional growth rates due to removal of taxation hassles.
“If you are making taxation easier,then you are improving the entrepreneurial skills of the people and therefore the country benefits. So therefore I personally believe that the GDP will experience additional growth rates,” he said. “The reality is simple. There will be some products that will become a bit dearer.It could be that clothing may become a bit dearer, but as you know a committee headed by CEA, who himself is a very highly respected economist, said that the impact of it is likely to be neutral to positive across segments compared to the current tax regime,” he said. To a query,Murthy said “There is an estimate that internal trade will increase by anywhere between 25 and 30 per cent while external trade may improve by as much as 30 per cent.
So therefore, GST initiative is very beneficial to the country, from all aspects – whether it is from the perspective of exports and imports,” he said. To a query, Murthy said “I have also been told that there is a report in US Fed paper that GST could help India as much as four per cent. I don’t know. If that is indeed true, then that is fabulous,” he said. The research paper at the US Central Bank reckoned the biggest indirect tax reforms since Independence could enhance India’s GDP by as much as four per cent or Rs 6.5 lakh crore.