ADB chief: GST will in­te­grate In­dian econ­omy

The Pak Banker - - FRONT PAGE -

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.

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