FM confident of introducing GST and DTC from 2011-12
February, 26th 2010
Finance minister Pranab Mukherjee on Friday began the presentation of Union Budget 2010-2011 with a renewed sense of optimism over the country's growth and clear signals from policymakers to bring deficits back to manageable levels.
He exuded confidence of introducing major reforms on direct and indirect taxes front in the form of Goods and Services Tax (GST) and Direct Taxes Code (DTC) from April one, 2011.
"I am confident that the government will be in a position to implement DTC from April one, 2011... It will be my earnest endeavour to implement GST along with DTC from April one, 2011," finance minister Pranab Mukherjee said in his Budget speech.
This means that GST would miss its earlier introduction deadline of April one, 2010, by a year.
While DTC will replace the archaic Income Tax Act, GST will replace most indirect taxes at central and states levels like service tax, excise duty, VAT, cesses, surcharges and local levies.
Beginning his speech, the finance minister said the Indian economy had weathered the crisis well but the main challenge was to make growth inclusive. The focus is to get a double-digit GDP growth rate, he said. Social sector reforms will also be on the agenda, Mukherjee said.
Economic growth in 2009-10 may turn out to be higher than 7.2%, the finance minister said. We hope to breach the 10% mark in not too distant future, he added. He said the need was to make growth more broad-based.
Pranab Mukherjee said Rs 400 crore to be allocated for green revolution in Bihar, Jharkhand, West Bengal and Orissa, and Rs 300 crore for creating 6000 pulse and oilseed villages.
In his Budget speech, the finance minister said allocation for roads has been raised by 13% and allocation for power sector doubled. 46% of total plan dedicated to infrastructure, he added.
Pranab Mukherjee said listing of PSUs will improve corporate governance.
Expectations are high from the 74-year-old veteran politician, who has tabled four budgets in the past, that he will address the twin issue of bringing down prices while ensuring higher overall growth for the economy.
At the same time, he is also under pressure to roll back, albeit gradually, the $37-billion stimuli announced since December 2008 to help India weather the global economic slowdown.
The Economic Survey 2009-10 presented on Thursday favoured the gradual rollback of stimulus measures that were introduced following the global economic meltdown in late 2008. However on the eve of the Union Budget, Mukherjee talked about the measures that would be taken by the government to deal with 17.85 percent food inflation and certain aspects of the economy.