The Parliament’s Monsoon Session started with hope that legislative reforms will get an impetus. Over a dozen bills have been listed by the government for this session, but the GST Bill will be the key priority. At the all-party meet on Sunday, Prime Minister Narendra Modi reached out to the Opposition for a consensus on the crucial reforms while the Congress has said it will support the bill based solely on merit. Speaking to Bloomberg TV India, Biocon Chairman and Managing Director Kiran Mazumdar Shaw says we need to come up with a flexible Bill that gives us an opportunity to quickly adjust to new businesses and economic opportunities, such as e-commerce, that India is embracing.
What are your expectations on GST?
I think all political parties have really tried all the manoeuvring they could to stall the GST Bill. When you talk about passing bills on merit, I think the GST Bill is certainly one such bill, which needs to be passed on the basis of its merits in terms of boosting economic growth.
I think the GST Bill has to be passed in some shape or form to start with. It does not have to be the perfect bill. We should not trap ourselves into making aspects of the GST Bill, which are constitutional amendments. We should leave it within the GST Bill because we are entering a very different kind of economy, which needs flexibility. I think the GST Bill will also have to be looked at in terms of e-commerce.
We need to look at the new kind of economic opportunities that India has. And if we start crafting your GST Bill based on traditional industry, I think we will be making a big mistake. So I personally believe that we do not have to come out with the perfect bill as understood by the regulators today. We need to come up with a flexible bill that gives us an opportunity to quickly adjust to new businesses and economic opportunities that India is adjusting to.
Is it prudent to fix a cap on GST rates?
I think it is not required as a clause at all. I do not agree with the Congress on insisting on the 18 per cent cap on GST. I think the GST Bill is a far-reaching one. It should avoid too many Constitutional amendments. What we really need to focus on are various aspects of the bill in terms of, do we really need to have a list of excluded items or just prioritise on the merit list; and then look at the impact on the other areas of products or services that come under GST. I am not very happy on the extra 1 per cent tax on manufacturing because it is counter-productive.