Arun Jaitley Finance Minister recently said that the government’s initiatives like ‘Swachh Bharat’, Goods and Services Tax (GST) and demonetisation are having the desired impact, the latter two resulting in increasing tax compliance and squeezing quantum of cash in the economy.
On Sunday of the India Conference to the Berkeley, Jaitley said that there is unanimous public support for the reforms being undertaken by the governments, public support the changes largely both at the center and state levels. He further added that ” I pray for the more progress and I do hope that India is able to retain its growth rate once again and live high up to the aspirations of its people because we belong to a large family as must not forget that we not only have a large population to service, we have a very young population to service,” he said.
On Monday Jaitley is scheduled to arrive in the US on nearly a week-long visit to interact with the US corporate world in New York and Boston and attend the annual meeting of International Monetary Fund and World Bank in Washington DC.
The population, as we all know, is high and for the youth, it’s not the only perception that they are being underserviced but they are becoming more and more aspirational. Jaitley said that the time is not in our favor it is against us,” as in the upcoming one or two decades if India has to take a challenge for moving into a higher economic group country, “competition prevails everywhere and for that we have to grow at a much faster pace,” he said.
While responding to a question he showed a refuted the impression thing have not resulted in any changes on the ground that transformational initiatives like
- Swachh Bharat
As per him ” These things will lead us to the progress and will provide long-term benefits and the country would have to wait for those? Or is there any way to mitigate the problem being faced by the country,” he was asked.
He argued for a more serious analysis would show that even within a matter of months there is a short-term positive impact of all these projects.
- As on the one hand, demonetisation and GST are having the desired impact in terms of tax compliances and squeezing the quantum of cash in the economy.
- And for the first time, ‘Swachh Bharat’ campaign has brought to fore the importance of cleanliness.
The minister said this has resulted in the creation of a national tax structure for the GST, “As in the last three months, all the checkpoints in states disappeared, and with a clear flow of goods and services which has started all over the country,” As now the GST Council has noted some challenges and it is taking steps to address them. As per him before demonetisation, Indian norm was to live with a high cash economy, not paying taxes –
- You buy a property
- You transact partly in cash
- And in business, you maintain two sets of accounts
By these things, He questions that “How can a country, which aims to be the fastest growing major economy in the world, which aspires to grow from a developing to a developed economy, continue with the normal of this type,” So for these you need a change “you need to shake the system and wake him up for the progress” in order to improve by reduce the quantum of cash in India and therefore obviously to make it a more tax complaint society.
As per him, Money itself involves several challenges. As it leads to corruption and several other problems, “If we compare from the previous quantum the number of taxpayers in India immediately increased in a matter of months? And this is the actual truth, the digitization transaction increased from Rs 70 crores to Rs 130 crores today, it almost doubled.”
At the same time, there is the immediate aftermath of demonetisation, there has been a sharp reduction in insurgent and terror activities in states like Jammu & Kashmir and Chhattisgarh, Jaitley said and the terror funding itself has gotten squeezed, he said. “You are having terrorist incidents, but the fact that you were finding 5,000-10,000 stone throwers being provided with money by the terrorist organizations, why is it that in the last 8-10 months it has not happened?” he asked.
Jaitley responded to a question saying that the Indian government wants to encourage startups in the country as for now the obvious challenge to the country is to grow and grow fast. It needs to grow at a much higher rate than we have been growing in past times as because the benefits of the growth must also reach that section of the population which till date has been the least serviced one.
To do business India was a far more difficult place, he said that situation has substantially improved for the better after observing the conventional past.
One of the two stigmas for India is Identifying corruption as Jaitley said the institutional mechanism to fight corruption has become much stronger. Asserting that direct taxes have to become “more rational and more reasonable” he has already announced a roadmap to bring down the corporate tax to about 25 percent and is trying to ensure that India becomes a far more compliance society and also tax assessment is more technology driven rather than human interaction.
GST, as per him has been a “reasonable smooth transformation,” but there is scope for improvement. He appreciated the decision by saying that “I think in GST Council we have succeeded in creating India’s first federal institution.” In the transition, he said that it would be a more successful experience which will fill the holes into India’s taxation system.