Q: What are the implications of the GST rollout for the economy?

A: The cascading effect of tax-on-tax on goods and services will be taken care of by subsuming existing indirect taxes. It will bring in a lot of certainty on the indirect tax front and this will provide a fillip to new investments, especially foreign investments.

By unifying all Indian states and UTs into a common market, GST will exponentially enhance the ‘ease of doing business’ for them and this can unleash India’s huge domestic potential.

Q: There are apprehensions that it will increase inflation in the near term. What are your views?

A: Yes, there is a likelihood of inflation flaring up temporarily once GST is rolled out. However, with the tax-on-tax cascading effect being taken care of, the prices will soon stabilise.

Q: How do you view the advancement of the Union Budget and merger of Rail Budget?

A: It is a practical move and will help bringing in better planning and utilisation of resources.

Q: What is the perspective on the NPAs plaguing the banking system?

A: Addressing the stressed assets/NPA problem of Indian banking system is of paramount importance. Banks’ inability to resume lending activity is emerging as a major constraint and may prevent India from capitalising on the window of opportunity that has opened up due to global conditions. At this stage, the priority should be on how to capitalise our banks well, to work out how best we can resolve the stressed assets problem and how best we can make our banking systems robust so that their operational efficiency improves.

Q: What is the reason that private sector investment is not picking up?

A: Our economy is in a phase where the consumption continues to grow whereas the production continues to be muted. This reflects the excess capacity that has already been built up. Until and unless this capacity gets saturated, private investment is unlikely to pick up.

Q: What is the outlook for the economy?

A: I am upbeat about the prospects of the economy. The progress made on the GST and the Insolvency & Bankruptcy Code fronts needs to be lauded. The governments, both at the Centre and the states, are serious about reforms and are willing to co-operate in order to drive growth. The NDA government has adopted an implementation-focused approach in respect of the various programmes it has announced and I find the state governments are willing to be part of those by rising above political differences. This indeed bodes well for the growth of the economy.