GST a bold new experiment in governance: Economic Survey

By facilitating inter-operability, UPI has the potential to unleash the power of mobile phones in achieving digitalisation of payments and financial inclusion

GN Bureau | January 31, 2017


#UPI   #digitalisation   #Arun Jaitley   #Economic Survey   #GST  


The Goods and Services Tax (GST) will create a common Indian market, improve tax compliance and governance, and boost investment and growth; it is also a bold new experiment in the governance of India’s cooperative federalism, said the Economic Survey 2016-17.

The Survey states that against the backdrop of robust macro-economic stability, the year was marked by two major domestic policy developments – the passage of the Constitutional Amendment, paving the way for implementing the transformational GST, and the action to demonetise the two highest denomination notes.

Read: GST bill passed: India looks set for its biggest ever tax reform

The Survey report says that demonetisation has had short-term costs but holds the potential for long-term benefits. Follow-up actions to minimise the costs and maximise the benefits include: fast, demand-driven, remonetisation; further tax reforms, including bringing land and real estate into the GST, reducing tax rates and stamp duties; and acting to allay anxieties about over-zealous tax administration. These actions would allow growth to return to trend in 2017-18, possibly making it the fastest-growing major economy in the world, following a temporary dip in 2016-17.

The Economic Survey 2016-17 states that the year was also marked by some tumultuous external developments. In the short-run, world GDP growth is expected to increase because of a fiscal stimulus in the United States but there are considerable risks. These include higher oil prices, and eruption of trade tensions from sharp currency movements, especially involving the Chinese yuan, and from geo-political factors. Another serious medium-term risk is an upsurge in protectionism that could affect India’s exports.

Read: The flawed premises of GST

The Survey states that the year also saw a number of legislative accomplishments in the country. In addition to the GST, the government:

•    Overhauled the bankruptcy laws so that the “exit” problem that pervades the Indian economy –with deleterious consequences highlighted in last year’s Survey – can be addressed effectively and expeditiously;

•    Codified the institutional arrangements on monetary policy with the Reserve Bank of India (RBI), to consolidate the gains from macroeconomic stability by ensuring that inflation control will be less susceptible to the whims of individuals and the caprice of governments; and

•    Solidified the legal basis for Aadhaar, to realise the long-term gains from the JAM trifecta (Jan Dhan-Aadhaar-Mobile).

Beyond these headline reforms were other less-heralded but nonetheless important actions. The government enacted a package of measures to assist the clothing sector that by virtue of being export-oriented, labour-intensive could provide a boost to employment, especially female employment. The National Payments Corporation of India (NPCI) successfully finalised the unified payments interface (UPI) platform. By facilitating inter-operability, UPI has the potential to unleash the power of mobile phones in achieving digitalisation of payments and financial inclusion, and making the “M” an integral part of “JAM.” Further FDI reform measures were implemented, allowing India to become one of the world’s largest recipients of foreign direct investment. The government has also adhered to a steady and consistent path of fiscal consolidation.

Read: UPI can be critical component for cashless initiatives

The report says that India seems to be a demographic sweet spot with its working age population projected to grow by a third over the next three decades providing it a potential growth boost from the demographic divided which is likely to peak within next five years.

The Survey report also states that the Swachh Bharat which has the objective of ensuring safe and adequate sanitation, water security and hygiene has been a part of serious policy issue which would promote a broader fundamental right to privacy for women in the country.
 

Comments

 

Other News

Cyber frauds helpline has helped save Rs 930 crore

Since its inception, Citizen Financial Cyber Fraud Reporting and Management System has witnessed more than 12.77 lakh complaints registered (till November 15, 2023), and has saved more than Rs. 930 crore in more than 3.80 lakh complaints. This was stated by minister of state for home affair

COP28 discusses climate resilient development in Himalayas

Impacts and implications of Climate Change Vulnerability in the Himalayan Region and ways of creating ‘Climate Resilient Development in Indian Himalayan Region by making mountain communities green and resilient were discussed the side event hosted at the India pavilion at the UN Climate Conference CO

Air Pollution: What needs to be done to tame the silent killer

Air pollution in Delhi has been in headlines, as every year in recent times. Mumbai too has suffered from air pollution, despite being a coastal city. Apart from many other metros such as Bangalore and Kolkata, tier-I and -II cities and rural areas also have high pollution levels. Every year reports and st

Free food grains for 81.35 cr beneficiaries for five years

The central government will provide free food grains to about 81.35 crore beneficiaries under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) for a period of five years with effect from January 1, 2024, the cabinet decided on Wednesday. Terming it as a “historic decision”, a

“I wrote ‘Survival at Stake’ to provide food for thought about solutions”

Survival at Stake: How Our Treatment of Animals Is Key to Human Existence By Poorva Joshipura HarperCollins, 328 pages, Rs 499 With science now recognising animal consciousness, intelligence, emotion, and even morality, there must rise an awareness of

‘Bon Voyage’ through the Arctic: Exploring new horizons for India

India`s tryst with trade through the Arctic regions, including the Northern Sea Routes (NSR), has become an impact-making endeavor recently. The Arctic of yore is now a pivot – point of geopolitics, of climate change discussions, and for economic opportunities; 40% of oil and gas reserves said to be

Visionary Talk: Amitabh Gupta, Pune Police Commissioner with Kailashnath Adhikari, MD, Governance Now


Archives

Current Issue

Opinion

Facebook Twitter Google Plus Linkedin Subscribe Newsletter

Twitter