Ready with the backup infrastructure for roll out of the Goods and Services Tax (GST), Economic Affairs Secretary, Mr Shaktikanta Das today said at an ASSOCHAM meeting he is hopeful that the Constitutional amendment bill for the most important tax reform would be passed by Parliament in the current session.
Addressing the Managing Committee meeting of the ASSOCHAM in New Delhi, the Economic Affairs Secretary said "I am sure Parliament will appreciate the advantages of GST...we hope it will be passed in the current session."
He said on its part the Government is ready with all the backup to roll out the new tax regime but it could be done not only after its passage by Parliament but also its ratification by at least half the number of the State Assemblies.
Briefing the ASSOCHAM Members about the salient features of the Union Budget for 2016-17, the Economic Affairs Secretary said a number of game changing structural reforms have been unveiled by the Finance Minister. These include dismantling the permit raj in the passenger transport sector, easing the renegotiations of the Public Private Partnership business agreements, giving a legal backing to the Aadhar Id. Cards and initiating several dispute resolution mechanisms in taxation.
Mr Das said the Government stuck to the path of financial discipline, pegging the fiscal deficit for 2016-17 at 3.5 per cent of the GDP "Why fiscal deficit target is important because it is about credibility of the Government, especially when it had benefitted from low crude oil prices."
He said the committee on review of the FRBM (Fiscal Responsibility and Budget Management) Act would be constituted in a month or so for giving a road map to fix the deficit target in a band rather than to the last decimal figure.
He said the budget has dealt with several critical sectors giving the first charge to the Agriculture and Rural Economy as people in the rural landscape are in a state of distress because of failure of monsoon for two consecutive years. He said a quantum jump allocation has been given for the rural infrastructure including roads, electricity and irrigation.
Investment in infrastructure would also be revived with the budget announcing a number of initiatives for easing rules in the case of highways and other projects in the PPP model. For instance the budget talks about a system of credit rating wherein the rating would be with reference to particular projects rather than companies. A window has been provided for long term contract renegotiations.
Referring to the problem of non-performing assets in the banking sector he said several sectoral initiatives have been taken. For instance the steel sector which has been in financial stress has been given protection against imports by way of 32 per cent import duty and other measures like fixation of minimum import price.
In his address ASSOCHAM President Mr Sunil Kanoria said the Government has come out with one of the most forward looking budgets. However he suggested fiscal incentives in areas like setting up of agri equipment banks which will operate on the leasing model.
Mr Kanoria also lauded efforts to revive business sentiments through investment in infrastructure.