At a time when India is facing criticism for the economic slowdown due to the demonetisation and the GST implementation, Finance Minister Arun Jaitley on Friday gave a clear message: Not safe to deal in large amounts of cash anymore. The Finance Minister’s comment aimed to clear the air on the motive of the demonetisation exercise. He emphasised that post-demonetisation dealing in large cash would not be safe, subtly indicating a possibility of curbing large-scale corruption.
Arun Jaitley also lauded the GST rollout saying that it was “smoother than expected” even as dealers using the GST Network continue to grapple with technological issues on the portal for returns.
“… these are early days of the implementation of the alternative taxation system. It appears to be so far going on
smoother than expected,” Jaitley said, addressing the 70th annual general meeting of the Indian Banks’ Association in the capital.
The GSTN-related problems range from payments not getting reflected in challans to issue of the summary showing details different from the uploaded details. The biggest problem that industry experts, tax consultants, and small business owners are struggling with is the overloading of the GSTN portal.
Moreover, in the first month under the GST regime, government’s revenue collection has remained muted due to high level of input tax credit claims filed by the taxpayers for the transitional period adding to the economic woes.
The GDP for the first quarter (April-June) of the financial year 2017-18 slumped to a three-year low at 5.7 per cent, far lower than 7.9 per cent recorded in the same quarter last year. The government is exploring ways to revive the economic growth and planning to loosen the fiscal deficit target (3.2% of GDP) so that it could spend an additional Rs 50,000 crore in the financial year ending in March 2018, Reuters reported. This move will push India’s fiscal deficit beyond normal range.
Talking about the demonetisation in context of digitisation and cashless India, Arun Jaitley said that the banking system has played a major role in India’s digitisaton & its transition towards a cashless economy. “Demonetisation provided a big challenge to the banks,” he said. They should be given credit for the way handled the demonetisation,” he said.