New Delhi: Exuding confidence on India outperforming other nations in economic growth and eliminating poverty, Prime Minister Narendra Modi outlined his government’s pledge to speed up tax reforms by rolling out goods and services tax by April 2016, shun retrospective taxation and cut corporate tax rate.
In an opinion piece in Germany’s newspaper Frankfurter Allgemeine Zeitung, Modi expressed happiness at being able to keep his poll promises in the last 11 months. “We have re-energised the Indian growth engine. The credibility of our economy has been restored. India is once again poised for rapid growth and development. It is the only emerging economy where growth rate is rising. The prospects are even better,” he wrote.
“Our focus is not merely economic growth but an inclusive development. This requires creating jobs, upgrading skills, raising productivity, benchmarking quality with global standards,” he said.
“Our aim is to completely eliminate poverty and to propel all Indians into a life of purpose and dignity within a generation,” he said.
Asserting his firm belief on the role of good governance in India’s economic development, the prime minister said “this noble objective can be achieved.”
India’s economic growth is projected to accelerate from 7.4 per cent in FY15 to 8-8.5 per cent during FY16, which will be faster than that of China and other major emerging nations.
Last week, International Monetary Fund’s managing director Christine Lagarde said while growth forecast for 2015 of most emerging nations are lower than last year, India was the “bright spot”. Moody’s recently upgraded India’s outlook to “positive” from “stable” even as the retaining the “Baa3” rating.
India has embarked on a series of reforms to accelerate growth. In his op-ed piece, Modi said: “my government has pledged a stable and transparent tax regime, reducing corporate taxes and implementing a single GST in 2016.”
Addressing Indo-German Business Summit on Monday, Modi said “we have removed lot of regressive taxation regimes. In our very first Budget, we said we will not resort to retrospective taxation. And if such issues do arise, they will have to be reviewed at the highest level. We have taken bold steps of not dragging the litigation in a few cases where we felt that the steps of the previous government were not on right lines.”
In the budget, the government has also deferred the implementation of GAAR for two years, proposed tax pass-through for AIFs, rationalised capital gains of REITs and modified PE norms. “We are constantly working to improve the business environment further. We are trying to introduce an element of transparency and predictability in taxation system,” Modi said.
Highlighting the importance of Make in India initiative, he said “generating jobs for India’s youthful population is a key to harnessing India’s demographic advantage. This can be achieved only when we significantly and quickly ramp up our manufacturing capabilities. To meet this objective my Government has unveiled the “Make in India” initiative. This is a win-win for all.”
“The employment opportunities that new manufacturing will generate will enhance the purchasing power of our people. This in turn will create a market for more trade and investment.
With 65 per cent of our population below the age of 35, the possibilities that India’s growth presents for global economic prosperity are immense. Through our “Act East” and “Link West” policy, India has the potential of becoming the middle ground for East and West as a manufacturing hub that serves both our vast domestic market and becomes a base for global exports and general well-being, he said.
“Our strategy for “Make in India” requires urgent creation of new infrastructure. The substantial enhancement in financing in the federal budget for highways, railways and energy is a step in this direction. Work has begun on the development of Delhi-Mumbai Industrial Corridor,” he added.
Since availability of a skilled work-force is a prerequisite for manufacturing growth, Modi said “My Government is giving the highest priority to the Skills India programme. We will focus on promoting models of vocational training according to specific needs of local industry, and to adopt best practices from abroad.” He pointed out that India targets to ramp up renewable energy capacity of 175,000 MW by 2022.
With growing urbanization in India posing as one of the greatest challenges, Modi said “the population in our cities is projected to double in 10 years. Our focus on development of Smart Cities is aimed at providing the basic necessities of affordable housing, clean water and a safe environment for our people.”
Pitching for better international relations, the prime minister said “I have therefore sought to build a foreign policy which is an integral part of our national development strategy. My interactions with leaders of USA, Russia, France, Japan and China have all aimed at creating enduring partnerships with shared stakes in global development and well-being.”