Perhaps for the first time, the government has taken a less-than-definite stance on whether the >Goods and Services Tax (GST) will meet its April 2016 deadline, citing actions of the Congress in Parliament as a major hindrance. The government has so far, in all its communications, been certain about meeting the deadline.
“If this kind of obstructionism by the Congress party remains, GST may miss the deadline,” Union Finance Minister Arun Jaitley said on Wednesday, speaking at The Economist India Summit 2015. “There is mostly a consensus behind the Bill, so it is only a matter of time before it is passed.”
This follows the Congress's announcement on Tuesday opposing a special session of Parliament for the passing of the GST Constitutional Amendment Bill, saying that “convening of a special session of Parliament will serve no purpose unless the government takes action against Sushma Swaraj and BJP chief ministers.”
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Terming the Land Bill “one of the worst drafted laws” he has seen, Mr. Jaitley during the summit also spoke about the government’s backing down on the Land Bill. “We have moved forward on the Land Bill and have achieved through an alternative route the same result we were trying earlier,” he said, referring to the States’ abilities to make amendments as required by them individually.
In the case of corporate tax and exemptions, the Minister said that the list of exemptions was imminent. “Over the next few days, we will come out with a list of exemptions which we intend to phase out in the first place. Over the next four years, corporate tax will come down by five per cent and lot of exemptions will get phased out,” he said.
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The government was slowly bringing taxation levels to global standards, he added.
Reviving banking sector
Regarding the banking sector, Mr. Jaitley said the government was taking several steps to address their concerns.
“It's [banking system] a matter of concern, it’s not the main worry. There is no ground to panic. The banking system that we inherited — primarily the public sector banks — was actually very challenging. When the economy slowed down, and when you inherit the economy at sub-5% level, it has an impact on the banking system as well… which added to the NPAs of public sector banks,” Mr. Jaitley said.
Of the sectors responsible for most of the NPAs, Mr. Jaitley said huge progress has been made in the highways sector. Regarding steel, he said that most of the factors ailing the sector were external, essentially to do with the dumping of cheap steel into the Indian market.
On State discoms
“As far as the discoms are concerned I am in touch with each of the States where the discoms need to be reformed. We are addressing each issue sectorally so that we can create a defensive mechanism,” he said.
“If the banks are fragile even after all these changes, our first objective is to strengthen these banks. After this, if there is a fragile bank we are looking at consolidation with stronger banks,” Mr. Jaitley said.