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GST Bill will help unify India, says RBI Governor

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By Arnab Mitra

Kolkata: RBI Governor Dr Raghuram Rajan said the GST Bill would help unify India during his talk at the prestigious Dipak Banerjee Memorial Lecture at the Presidency University on Thursday.

“The GST will help to bring more people on tax net and will reduce the barriers between states as they will have a uniform policy in terms of inter-state trading,” said Rajan.

Rajan’s lecture was on the topic of ‘Debt Policy’ in our country and around the world.

He described the disappointing fact that how money lenders in the country were routinely exploiting the poor class. The comment is very significant as, in West Bengal and in India at large, the population is vastly affected by scams such as the Saradha scam and Rose Valley scam among others.

However he warned big companies from borrowing heavily from banks as over-leveraging creates trouble.

“Moderation is required and some debt is good; but not too much. Avoid borrowing a huge amount to avoid problems,” Rajan added.

On being asked whether he was linking the issue of debt policy with the political scenario of the state, or its economic condition, he sidestepped the issue saying he wasn’t much aware of the condition in West Bengal.

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India Finally Rolls Out GST After 17 Years of Struggle: Why there are Mixed Reactions?

The Bill was Passed in the Midnight at the Parliament House on 1st July

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GST. Wikimedia
  • Modi pointed out number of chapters in the Bhagavad Gita were same as number of times the GST council had met ie 18
  • The President said that during his term even Modi had some issues about the bill but then praised Modi of having a constructive approach towards GST
  • Arun Jaitley complemented the quality and maturity with which the political stakeholders made the GST launch a success

July 1, 2017: After 17 years of limitless struggle, finally on July 1, 2017, GST (Goods and Services Tax) became a reality in India and the country is having mixed reactions about it. While some segment of the population is happy about it, some think it would give rise to inflation and other simply don’t understand the GST bill.

The Bill is launched from the Parliament House where Prime Minister Narendra Modi was the person who made this into a reality. He translated this historic tax reform as ‘Goods and Simple Tax’.

During the enactment speech, Modi also pointed out two similarities in the Indian history and GST bill. One was that the number of chapters in the Bhagavad Gita were same as the number of times the GST council had met i.e. 18. Secondly, one was the number of taxes before GST and number of self-governed provinces in India before they were brought under one government by Sardar Vallabhbhai Patel.

ALSO READ: Fearing Abduction, Tribal women Harm their Faces to make them less Appealing to Men

PM Modi said GST was not only a tax reform but a social reform too, and added, “Just like Sardar Vallabhbhai Patel united over 500 provinces into one India, there were 500 different types of taxes spread across 29 states and seven Union Territories that we are bringing into one tax regime…. The best brains in the country have been working to make GST a reality and today it has become an exemplar of cooperative federalism in the country.”

Another notable thing about the GST launch was the attendees of the event. The SP (Samajwadi Party) and the BSP (Bahujan Samajwadi Party) didn’t have any take on attending the session but finally, they changed their minds and Ram Gopal Yadav from SP and Veer Singh with Raja Ram from BSP also attended the launch.

The only corporate leader was Ratan Tata and from the Bollywood industry, actor Amitabh Bachchan and Lata Mangeshkar were also invited.

Modi’s speech followed the speech of Pranab Mukherjee who said, “It is also a momentous occasion for me personally. I had introduced the Constitutional Amendment Bill in 2009 as the Finance Minister.”

He also added that during his term even Modi had some issues about the GST in a subtle way but then praised Modi of having a constructive approach towards GST.

After the President, Arun Jaitley was the third speaker who complimented the quality and maturity with which the political stakeholders made the GST launch a success. He also added that “this is a high point in Indian Politics.”

While the Opposition parties, including the Congress, didn’t attend the launch. They criticized that the bill was passed in a hurry and called it a blunder.

The government claimed that the reform will successfully create a national market, enhance the ease of doing business and improve tax compliance. Now after the successful launch of the event, the next most important thing would be towards the implementation of India’s biggest tax reform.

– by Sumit Balodi of NewsGram. Twitter: @sumit_balodi

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Arun Jaitley slams Congress for delay in GST bill

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New Delhi: Lashing out at the Congress party again for blocking a pan-India goods and service tax regime, Finance Minister Arun Jaitley on Saturday said some reform-oriented laws, nonetheless, were expected to be passed during the remaining three days of what has been a none-too-productive winter session of parliament thus far.

“The next three days are crucial with very important pieces of legislation coming up before our parliament,” Jaitley said here addressing the annual general meeting of the Federation of Indian Chambers of Commerce and Industry (Ficci).

Among the legislations listed by him, one was on the bankruptcy code and the other on arbitration.

Nonetheless, he said the steps taken by his government will prove to be beneficial. “We’re hoping that structural reforms undertaken will help us go to 8 percent growth in 2016-17,” he said, even as the mid-term economic survey released a day before had cut the prospect to 7-7.5 percent.

Jaitley’s speech had political content as well, notably on the effort in vain, thus far, to get the goods and services tax bill passed in the current parliament session. “I’ve no doubt in my mind that the attempt to delay the GST is entirely for collateral reasons,” he said.

“The only collateral reason I suspect is: ‘If I couldn’t do it, then why to let someone else do it’!” Jaitley exclaimed, but added: “A delayed GST is better than a flawed GST.”

As regards the legislations which the government wished the two houses to consider over the next three days, Jaitley said one of them sought to put India back on the global adjudication map for cases of arbitration as the costs of such litigation were enormous abroad.

“We’re bringing in a bill for fast-track arbitration, including single-member tribunals.”

He also referred to the proposed new bankruptcy code that aims to resolve cases of insolvency at the earliest so that amounts lent to such companies can also be recovered fast. The bill has proposed a timeline of 180 days, extendable by another 90 days, to resolve such cases.

Speaking at the event later, Jaitley’s deputy and Minister of State for Finance Jayant Sinha forewarned that low farm sector growth and the cost of implementing the pay commission recommendations together with a slow global expansion will prove to be taxing for his government next year.

“Next year is a challenging year. Headwinds of two major factors will be slowing us down,” Sinha said, adding the slowing farm output growth was the result of two successive years of bad monsoon and the global slowdown was hitting India’s merchandise exports.

He also said the government has its task cut out in meeting the fiscal deficit targets.(IANS)

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NDA’s Bihar debacle proving blessing for realty

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Picture Courtesy:-www.newindianexpress.com

New Delhi: Contrary to the general impression, the defeat in the Bihar assembly elections has not dealt any blow to the reforms agenda of the ruling National Democratic Alliance. Rather, it has proved to be a blessing in disguise for the Prime Minister Narendra Modi’s government to fast-track reforms – legislative and administrative.

For the realty sector, those that stand out include the move for a pan-India goods and services tax regime and legislation for a real estate regulator, both of which are expected to get the parliamentary nod in the current winter session of parliament.

Close on the heels of the Bihar defeat, the government gave a Diwali bonanza by easing foreign investment norms in 15 major sectors, including construction, and raising the approval limit for the Foreign Investment Promotion Board (FIPB) from Rs.3,000 crore to Rs.5,000 crore.

It removed entry and exit barriers in the construction sector, doing away with area restriction of 20,000 sqm and capitalisation of $5 million and allowing foreign investors to exit and repatriate investment before a project is completed but with a lock-in period of three years.

The government’s sense of the real estate industry is that it should not survive on subsidies but on the strength of the market economy. That’s why it’s focusing on realty reforms aimed at strengthening fundamentals for the sustainable revival of the sector.

The delayed reforms had affected the market sentiment and the government has been receiving a lot of flak for its inability to check retail inflation and generate employment.

The government realises it is imperative to provide momentum to reforms if it has to leverage strong domestic growth in the form of healthy seven percent plus GDP growth in the coming fiscal, besides picking up manufacturing activity.

The assessment of global rating agencies like Moody’s weighs heavily on the government’s mind that delay in reforms may hit investment. The Organisation for Economic Co-operation & Development (OECD) has also emphasised that India’s growth prospects remain relatively robust provided further progress is made on implementing structural reforms.

The government is focusing on triggering investment. By exercising tight control over unproductive expenditure, it has greatly increased capital investment by the public sector. And to further push this, the National Investment and Infrastructure Fund has been set up to leverage public investments.

The government also plans to come up with tax-free infra bonds to broaden the corporate bond market and provide long-term finance for infrastructure. It is also looking at providing tax incentives to spur investment in housing.

Then, FDI has considerably increased and private investment is picking up. The government is also working on simplifying FDI & ECB rules to speed up foreign investment.

It plans to put 98 percent sectors for foreign investment under the automatic route. And, to help the fund-starved real estate sector to tide over the current crisis, the government is working on allowing foreign investments in alternate investment funds (AIFs) and in infra and realty trusts via the automatic route.

The most crucial piece of legislation that has a big bearing on real estate is the GST Bill expected to be passed in the current parliament session, especially as the government has now adopted a collaborative and accommodating approach.

The introduction of a single GST rate across the country is aimed at dismantling the inter-state fiscal barriers to create a common market within India to boost competitiveness and make it easier to do business.

It will result in simplification and uniformity of taxes, putting an end to tax inefficiency in the form of different state-specific VAT and service tax laws. Though there are two main taxes for home buyers – VAT and service tax – multiple taxes in the form of CST, custom duty, excise duty and the like paid by developers result in price escalation by about 25-30 percent.

A likely GST rate of about 20 percent (the Congress party is demanding a cap on 18 percent) should be quite beneficial for the sector in lowering the current tax burden, in turn resulting in the reduction of home prices. Separately, the government proposes to provide tax relief to the real estate sector in the budget for 2016-17.

The decks are already cleared for crucial Real Estate Regulation & Development Bill, 2013 in the winter session as the government has accepted changes proposed by a Rajya Sabha panel. This bill will give a major boost to real estate sector, bringing in fair play and transparency in transactions to safeguard the interests of buyers and investors.

The government, which has already streamlined environment clearances for improving ease of doing business, is now fast- tracking single window clearance system for multi-storied buildings that should come through by early December 2015.

The simplified process will considerably cut delays in granting approvals, in turn resulting in cost reduction that will benefit property consumers.This will also provide much – needed relief to debt- ridden developers by way of faster projects completions and lesser interest outgo.

For its flagship programme — “Housing for All”, envisaging building 30 million houses, the government is readying a plan to provide more funds for constructing rural houses and providing subsidised power and water. Under its AMRUT programme, the Centre has allocated Rs 11654 crore for infrastructure upgrade.

The Bankruptcy Code — providing for an easier exit for businesses, safeguarding the interests of lenders and investors — together with proposed new start-up policy, will foster new enterprises and fast-track winding up of failed enterprises, with a view of strengthening ease of doing business.Further, labour reforms are aimed at removing rigidity and encouraging employment.

The government’s new-found aggression and resolve to push reform agenda have already seen the BSE Realty Index, registering the most rise in the last fortnight and further reform measures to be unveiled in the budget, will serve to speed up the revival of real estate facing the slowdown.

(Vinod Behl, IANS)