With the right type of reforms, the country's GDP growth rate could be increased to 12 per cent from the current 8 per cent, which had been achieved despite various constraints, said Venu Srinivasan, Managing Director of Sundaram Clayton, here on Saturday.
Releasing a survey report on “Goods and Services Tax,” prepared by CII-KPMG, he said by increasing the growth rate of manufacturing, agriculture, export and infrastructure sectors by one per cent each it was possible to achieve more than 12 per cent growth rate.
Describing the Goods and Service Tax as one of the major reforms in the tax regime, he said the proposed GST would have significant impact on business. There were many benefits from the GST though there were some concerns, which could be removed. He expressed hope that the path-breaking reform should make India more competitive, especially in the manufacturing sector. China, the country with which India had to compete in the world market, was 15-20 per cent more competitive than India. Its share of manufacturing in GDP was over 30 per cent while that of India it was only 15 per cent.
Stressing the need for inclusive growth, Mr.Srinivsasan said for achieving it there should be 20 million new jobs every year. It was not possible for the services sector alone to create such high volume of jobs and the manufacturing sector should be accepted as a key player. For the manufacturing sector to be more competitive, the interest rates should be rationalised, input costs should come down, running of a plant should be freed from the plethora of rules and the industry should be saved from the cascading effect of the present tax system. India needed more of a free trade agreement among the States than international agreements.
T. Kannan, chairman, Trade, Taxation & Globalisation, Sub-Committee, CII Southern Region and Managing Director, Thiagarajar Mills Ltd, said GST was the latest among the major reform proposals of the government. He expressed hope that the new tax regime would lead to improved tax collection and reduction in fiscal deficit.
Sachin Menon, Executive Director and Head of Indirect Tax, KPMG, in his presentation of an “Overview of GST” said the GST was the “mother of all fiscal reforms,” which was likely to end the regime of a plethora of taxes. The present tax system was more to the advantage of the manufacturing States than the consuming States, which could not get the fruits of the taxes paid by its people.
There was a panel discussion on “GST – Challenges and Opportunities” in which chief financial officers of various companies participated.
