FM says GST, which is a transaction tax, can be rolled out any time next fiscal year
Dubai: After the big-bang FDI liberalization, Finance Minister Arun Jaitley on Tuesday said the government will be able to get the contentious GST Bill passed in the Upper House of Parliament even though the main opposition party Congress was playing “hide and seek” on supporting the country’s biggest tax reform.
“The Lok Sabha has passed it (GST Bill). The day it is discussed and put to vote in Rajya Sabha, I have not the least doubt it will be approved. I am reasonably confident. We have the numbers at our side,” Jaitley told Bloomberg TV India in an interview.
Blaming the delay on the tax reform to the opposition of Congress, he said “I absolutely have the numbers except Congress, which is playing hide and seek. Nobody else is opposing it.”
Jaitley, however, pointed out that the tide will turn in favour of the ruling party in the Rajya Sabha next year. “Come April, the Congress’ numbers in the Upper House are going to further deplete and NDA numbers are going to further increase,” he said.
Allaying apprehension that the dismal performance of BJP in Bihar election will hit key reforms like the GST, Jaitley said “I have calculated that the best beneficiary of GST is going to be Bihar as it is a completely consuming state. Bihar does not produce any industrial products. Therefore, Bihar does not have anything to lose. Therefore, for all the MPs from Bihar to say we won’t support GST Bill does not make sense.
In fact, Jaitley said Bihar Chief Minister Nitish Kumar and his party Janata Dal (United) have supported GST Bill in the past. “And I have not the least doubt they will support it even now.”
Jaitley said the government has kept three supporting legislations ready and firming up the IT backbone (GST Network) to pave the way for Goods and Services Tax soon after the Constitution (One Hundred Twenty Second Amendment) Bill is passed by Parliament.
While admitting that he was not sure that GST can be rolled out from April, Jaitley said: “GST is not an income tax. So it does not have to wait till April 1. It is a transactional tax, which can come into operation as soon as the Constitutional framework allows it.”
The past two sessions of Parliament were disrupted by Congress members demanding resignation of External Affairs Minister Sushma Swaraj and Rajasthan Chief Minister Vasundhara Raje for their alleged involvement with fugitive Lalit Modi. Congress also demanded the ouster of Madhya Pradesh Chief Minister Shivraj Singh Chouhan for the VYAPAM scam.
While the government is lining up a raft of reform Bills for the winter session of Parliament, there is apprehension over the smooth running of both the Houses as the Opposition led by Congress plans to raise the issue of growing intolerance in Parliament.
“I would welcome a debate on so called intolerance issue. If you are not ready to debate, who is intolerant?” Jaitley said.
While critics have often pointed out that reforms have been sluggish, India has been acclaimed by global institutions like the IMF as the only “bright spot” in an otherwise gloomy global economic scenario.
Jaitley said India is placed reasonably “high” on the investment agenda as all government policies have been aimed towards liberalization. Opening up of new sectors to foreign direct investment was sending a “good signal” and investors looking at entering defence and railways in a big way.
Asserting that he was getting positive feedback on the easing of FDI regime, liberalization, Jaitley said liberalization was progressing in “baby steps” after the opening up of the economy in 1991.
With the government cleaning up the FDI processes, the finance minister said it is important for investors to know that the policy is stable and the return on investment from India will be much higher.
During his UAE visit, Jaitley invited sovereign wealth funds and pension funds to invest in the National Infrastructure and Investment Fund (NIIF).
Jaitley admitted that infrastructure investment bears “scars of the past” for investors but said the government was trying to clean up the “wounds”.
DELIBERATE DELAY ON DISINVESTMENT
While there has been growing uncertainty over the government’s disinvestment programme, Jaitley termed it a “conscious holdback” on some of the stake sale plans.
Global markets are not supportive of divestment right now, he said adding the government will not sell stakes in PSUs at low prices just for the sake of divestment.
Although the government planned stake sales in Coal India, SAIL, NMDC and Nalco, a global slump in commodity prices have clouded the outlook for the mining and metal PSUs.
Though the disinvestment target of Rs 69,500 crore appears to be missed with a big margin during FY16, Jaitley allayed fears of overshooting the fiscal deficit target of 3.9 per cent of GDP saying robust indirect tax collection will offset the divestment shortfall.