ADB chief: GST will integrate Indian economy

NEW DELHI: Asian Development Bank (ADB) president Takehiko Nakao has pitched for roll out of the Goods and Services Tax (GST) saying that its introduction will integrate India as "truly one single economy" and helps attract more foreign investments.

"We are now expecting that economy will continue to exceed 7 per cent in fiscal year 2016-17 and 2017-18 and we are now looking at the number again. The global economy and the Asian economy as a whole are in some form of adjustment," Mr. Nakao said. Mr. Nakao said the pending issue of GST can be done, and it will boost growth. "For India to grow faster, FDI is important... For that purpose, Indian economy should be integrated as truly one single economy and rationalisation of tax, the GST, as the government is seeking, is very important reform. I hope it can be successful," he said.

The government has taken many measures, including increasing investment in infrastructure and higher ceiling for foreign direct investment as well as making efforts to improve the ease of doing business, Mr. Nakao said.

When asked as to what more reforms government should pursue, he said: "One of the important agendas for India is to push infrastructure investment. They need to invest more in infrastructure. We are talking lot about the PPP but also it is important that government itself invest more and also they must invest more in health, education zone."

Land acquisition is another area, which requires reform, he said, adding that State governments can frame their own land acquisitions laws. "Government needs to have more tax revenue to GDP ratio to do all these things. Tax to GDP ratio, including State taxes can be larger. Of course, it's a difficult issue but I think government can play better role in those areas of infrastructure investment," Mr. Nakao.