He said that the advantage of the move is that the money which was “there in the bathroom, in the bedroom and under the pillow, has come back to the banks and today the banks' interest rates has come down to 8.25 per cent.
Vice-President M Venkaiah Naidu today said that adopting the regional value chain approach could be an appropriate model for India to foster intra-regional trade. “Although India has a lot of trading agreements, both regional and bilateral, the country is yet to fully capitalise on the existing synergies in its Regional Trading Agreements. “An example is the South Asian Free Trade Agreement (SAFTA) as the South Asian region is the least integrated among all the regions in the world,” he said here. “Adopting the regional value chain approach could be an appropriate model to foster intra-regional trade by deepening regional processes,” Naidu said. Terming GST as a “revolutionary transformation”, he said economic reforms like demonetisation and GST face “teething problems” initially but will increase revenues going forward. He said emerging economies, like India, Brazil and China, have evolved from policy takers to policy makers and India is on course to be the third largest economy globally. Demonetisation has helped bring 1.8 crore more taxpayers into the tax net and 8.27 crore entities paying taxes, the vice-president noted. With more number of income tax payers, the tax rates will come down and with more money deposited in banking system, the interest rates has come down, he said. “Demonetisation is the boldest economic reform taken by the government…because you know getting back the money to the bank is not an ordinary thing…,” he added.
He said that the advantage of the move is that the money which was “there in the bathroom, in the bedroom and under the pillow, has come back to the banks and today the banks’ interest rates has come down to 8.25 per cent. That is the greatest advantage of demonetisation”. Fiscal prudence and health of the country has also improved, he said, adding “GST is one of the revolutionary transformations that have taken place in the country”. The number of people in the income tax has increased by around 1.8 crore, the vice president said adding that since independence, “we have 6.47 crore people, now the people under tax net are 8.27 crore . It is a tough reform”. “You know any reform would face some teething problems in the initial stage and same was the case in both demonetisation and GST,” he said. However , the reform has long term advantages , he added. He also described these reforms as “the two beautiful” reforms that has happened. Naidu further stated that CAD has improved and now it is in the range of 0.5 per cent to 1.5 per cent from the earlier range of 6.8 per cent and 4.2 per cent. He added that reforms including GST, easing regulatory environment, facilitating FDI across all sectors, recapitalisation of public sector banks and insolvency and bankruptcy code are really going to do wonders in due course of time. Wooing investors to invest in the state, Naidu said Andhra Pradesh is India’s sunrise state and tops in promoting ease of doing business.
“Reforms are in full swing. There is a stable government and able leader at the Centre. You have stable government and able leader at the state as well,” Naidu said. Further, he said as per estimates of global agencies, India is a bright spot in the world today. He said there is tremendous shift now due to rising influence and role of the emerging economies across the globe. “It has led to a shift of balance of power between the global north and global south. This is perhaps the most significant geo political development of the recent times. Emerging economies like Brazil China and India are from playing significant role in multi lateral bodies,” he added. The vice-president said domestic firms should find ways to achieve higher exports. “Indian companies need to identify segments of global value chains with higher value addition and low entry barriers in global markets to achieve higher exports in the short term,” he noted. Naidu was addressing a gathering of trade ministers of various countries, business heads and delegates after inaugurating the Partnership Summit 2018 this afternoon.
Noting that the global economy was showing signs of pick-up after a prolonged phase of slowdown, Naidu, however, said the projected rates for global expansion were much below pre-crisis averages, especially for the advanced economies as well as commodity-exporting countries. “Already there are calls for protectionism from the advanced economies which, when implemented, could mean restrictive policies for cross-border trade and investment flows. This could bring attendant repercussions which might undermine the nascent signs of growth revival,” he added. Speaking about Indian micro, small and medium enterprises, Naidu said connecting them to global value chains was critical. “Access to technology and internet can be a major factor to allow SMEs to integrate with the global market. E-trade allows SMES to reach out to new export avenues and access to low-cost imported inputs”. Union Commerce Minister Suresh Prabhu, Civil Aviation Minister P Ashok Gajapati Raju, Andhra Pradesh Chief Minister N Chandrababu Naidu, CII Director General Chandrajit Banerjee, CII chairperson Sobhana Kamineni and Adani Group Chairman Gautam Adani, among others, were present on the occasion.