India fastest growing major economy, trend to continue for some years: Jaitley

GST FORMALISING ECONOMY, WIDENING TAX BASE

19/06/2018

NEW DELHI, Jun 18: Union Minister Arun Jaitley has said that 7.7 per cent economic growth in the fourth quarter of 2017-18 'firmly' established India as the fastest growing major economy in the world and the trend is likely to continue for some years.
Taking a dig at the critics of the government, Jaitley said that India's GDP has not declined by 2 per cent on account of demonetisation and GST implementation, nor will it India live in poverty as predicted by former finance minister.
"With structural reforms like demonetisation, the implementation of the Goods and Services Tax and the enforcement of the Insolvency and Bankruptcy Code, we had two challenging quarters. Those who predicted a 2 per cent decline in GDP growth have been conclusively proved wrong," he said in a Facebook post.
"A distinguished predecessor of mine feared that he may have to live his future in poverty. We have enabled every Indian to be a part of the world's fastest growing economy. The future looks much brighter than the past. This trend is likely to continue for some years, he said.
"The fourth quarter results of GDP data showed a phenomenal 7.7 percent growth rate and has established India firmly as the fastest growing global economy. This trend, according to experts, is likely to continue for the next few years," he said.
Former prime minister Manmohan Singh had predicted that GDP would decline by 2 per cent on account of demonetisation, while former finance minister Yashwant Sinha had said that policies of the Modi government will make people poorer.
Observing that another former finance minister had suggested that the government should cut the tax on oil by Rs 25 per litre, Jaitley said: He never endeavoured to do so himself. This is a Trap' suggestion. It is intended to push India into an unmanageable debt something which the UPA Government left as its legacy.
We must remember that the economy and the markets reward structural reforms, fiscal prudence, and macro-economic stability. They punish fiscal indiscipline and irresponsibility. The transformation from UPA's policy paralysis' to the NDA's fastest growing economy' conclusively demonstrates this .
Senior Congress leader P Chidambaram last week claimed that it was possible for the Centre to cut tax up to Rs 25 per litre on petrol prices but the Modi-government will not do so.
The former finance minister had also said that the BJP government pushed people into poverty and the number of people below poverty line has gone up than what was during the UPA regime.
The Finance Ministry today said it would be increasingly difficult for businesses to remain outside the tax net as GST is leading to formalisation of the economy.
The Goods and Services Tax (GST) was introduced from July 1 last year to subsume plethora of indirect taxes like excise and sales tax.
“Historic tax reform GST has resulted in formalisation of the economy and consequently information flow would eventually augment not only the indirect tax collections but also direct tax collections,” the ministry said in a statement.
Before GST, the Centre had little data on small manufacturers and consumption because the excise was imposed only at the manufacturing stage while the states had little data on the activities of local firms outside their borders.
Under GST, there will be “now seamless flow” of availability of common set of data to the Centre and the states, making direct and indirect tax collections more effective.
Jaitley along with senior ministerial colleagues and officials today discussed the future course of action for debt-laden Air India, weeks after its strategic disinvestment proposal failed to attract any bidders, sources said.
The meeting was attended by Piyush Goyal, who has been temporarily given the charge of finance ministry, Civil Aviation Minister Suresh Prabhu, Transport Minister Nitin Gadkari and other senior officials.
According to sources, the meeting, chaired by Jaitley through video conferencing, took stock of the developments related to debt-laden Air India and discussed the way forward.
The report prepared by consultancy EY, the transaction advisor for Air India's proposed strategic disinvestment, was discussed. The report has listed out the reasons for the disinvestment failing to elicit any initial bids as the deadline ended on May 31, sources said.
When asked about today's meeting and whether any decision was taken with respect to Air India, Civil Aviation Secretary R N Choubey said the Department of Investment and Public Asset Management (DIPAM) would issue a statement on the matter.
Last week, a source had said the government was considering listing of debt-laden Air India after the proposal for 76 per cent strategic stake sale failed to attract any bidders.
In a major setback, the government on May 31 said that no initial bids were received for the proposed stake sale in Air India and that various options would be explored for the airline's future.
The government proposed to offload 76 per cent equity share capital of the national carrier as well as transfer the management control to private players, as per the preliminary information memorandum.
The transaction would have involved Air India, its low cost arm Air India Express and Air India SATS Airport Services Pvt Ltd. The latter is an equal joint venture between the national carrier and Singapore-based SATS Ltd.

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