Goods and Service Tax to encourage inclusive growth
March, 07th 2011
Mr Sunil Mitra revenue secretary at the finance ministry said that Union Budget for 2011-12 is a balancing exercise which provides for fiscal consolidation while maintaining high economic growth without fuelling inflation.
Mr Mitra while addressing a post Budget seminar organised by The Associated Chambers of Commerce and Industry of India said that more significantly, initiatives to introduce the goods and services tax will promote manufacturing sector and generate new employment opportunities needed for inclusive growth.
Mr Mitra said the Budget proposals mention achievable target of bringing down the fiscal deficit to 4.6% of the GDP by next financial year. But there are challenges like rising global commodity prices, high domestic inflation and the current Middle East crisis which is pushing up crude oil prices.
Still, said Mr Mitra, the Budget sends out a strong message of stable and predictable economic environment in coming years as the country continues on a high growth path despite global uncertainties. He added that cooperation from states will be required to usher in the GST structure.
Mr S Dutt Majumder chairman of the Central Board of Excise and Customs said the move to take out 130 items from the list of 350 exempted from excise duty will widen the tax net and increase governments fiscal revenues. He said the Budget has proposed duties for healthcare industry and those which encourage environment-friendly technologies.
Mr YG Parande member of CEBCs budget and computerization divisions said that the Budget provides for self assessment in customs to facilitate exports. So far, the provision for sel -assessment was for paying excise duty and service tax. He said that The government will incentivise tax compliance. There will be severe penalty for those who use non-compliance as a business strategy.
Mr Dilip Modi president of ASSOCHAM said the Budget is growth-oriented that provides for plugging leakages in subsidies and administration. It calls for efficient management of government expenditure.
Mr Modi said that tax free bonds of INR 30,000 crore and provisions to encourage inflow of foreign funds for infrastructure development are welcome steps. He said that ASSOCHAM will work with the government to build a progressive India.