Pranab Mukherjee as Finance Minister could hardly push through any of the crucial reforms, so necessary to catapult growth in the economy.
FDI in multi-brand retail and Pension Reforms Bill remains stalled because of opposition from Mamata Banerjee, while the Goods and Services Tax has seen opposition from Chief Ministers of the various states. The Direct Tax Code and the Insurance Bill are other crucial reforms that remain pending. Take a look at the reforms that are stuck and some have been in a limbo for years.
Good and Services Tax
The Goods and Services Tax (GST) would replace the various tax levies such as excise duty, service tax and value-added tax (VAT) and is likely to be a landmark reform. The states along with the central government will impose tax on almost all goods and services produced in India or imported.
The Goods and Services Tax is to be implemented in April 2013, however, there has been opposition from the Chief ministers. They believe that their autonomy to levy taxes would be jeorpardised should GST be implemented.
It's an important reform and perhaps one of the most important one that needs to be implemented on a war footing.
FDI in multi-brand retail
Foreign direct investment in multi-brand retail is yet another crucial reforming pending with the government. The reform is being opposed by TMC leader Mamata Banerjee. Critics of the reform argue that allowing foreign companies into multi-brand retail will lead to joblessness, particularly among shopkeepers and individuals who run the khirana shops.
However, multi-brand retail will also create jobs, reduce wastage and offer better prices to consumers.
Direct Tax Code
The Direct Tax Code (DTC) if implemented would bring about dramatic changes in the taxation systems of the country. It would replace the old Income Tax Act of India and is again a landmark reform.
The DTC would have a bearing on individuals as well as corporate with changes in taxation slabs, provident funds, insurance policies, home loans, mutual funds and equity shares.
Pension Fund Regulatory and Development Authority Bill, 2011.
The PFRDA Bill, has been pending for many years and seeks to open the pension sector to private sector and foreign investment.
Earlier this month the government differed the bill amidst opposition from allies.
Bowing to pressure from Trinamool Congress and other allies, the government recently postponed a decision on retaining the Foreign Direct Investment (FDI) limit in the insurance sector at 26 per cent as suggested by a Parliamentary committee.
The Insurance Bill is another crucial reform that would go along way in benefiting the insurance sector.
Clearly, the next Finance Minister has a crucial job to push the reforms agenda by getting allies the opposition and Chief ministers of the various states on board. It's a difficult and dirty job for sure, but extremely crucial to propel India's growth story.