Tax collections are only at 10.0% of the GDP compared to the initial budget estimates of 10.9%. India can ill afford this trend” Arun Jaitley Finance Minister
NEW DELHI : Finance Minister Arun Jaitley on Monday called for implementation of the Goods and Service Tax (GST) at an early date, pointing out that it has the potential to significantly improve India’s growth story.
In a pre-budget consultation, he urged the chief ministers and finance ministers of the states to cooperate in resolving some vaxation issues holding back GST, the decision about which was taken seven years ago in 2007-08.
“I have been informed that on many issues convergence of views has happened and there are some vexatious issues which only need resolution. I wish and hope that these will be sorted out sooner than later,” he said. Issues like inclusion of petroleum products in GST and revenue loss of states after GST is implemented have resulted in delays. At the meeting with the union finance minister, Assam Chief Minister Tarun
Gogoi supported introduction of GST, but said petroleum products should be kept out of its purview.
He said in order to allay apprehensions of the states about future revenue loss on account of introduction of GST, there should be a “Constitutionally mandate compensation mechanism.”
He also sold to the state leaders Prime Minister Modi”s idea of “Team India” for the Centre and States complete each other in managing the economy as a “cooperative federalism.”
Jaitley said ”Team India” is not limited to the Government sitting in Delhi but also includes states as equal partners in the growth of this great nation.
As regards the National Food Security Act enacted by the previous UPA government, he hinted some cost cutting measures “to ensure real food security.” He promised to incorporate the best practices of the successful PDS models in some states to improve the delivery under the Public Distribution System (PDS).
Jaitley also laid stress on decentralising procurement of foodgrains for effective foodgrain administration, besides restructuring Food Corporation of India (FCI). He cited the decentralised procurement already done by some states in this regard.