Day 2 of Vibrant Gujarat Global Summit sees serious business talk

Arun Jaitley says that it was a Constitutional necessity to roll out the GST

Day 2 of the Vibrant Gujarat Global Summit saw some serious business talk by corporate captains, market regulators and national leaders alike. From the need to implement GST at the earliest to recommendations for a flat 18 per cent corporate tax rate for all (sans exemptions), to the need to have an automobile policy for the state of Gujarat that is evolving as India’s next big auto hub, to the country’s banking regulator urging the Centre to reduce high federal and state government borrowing; Mahatma Mandir was reverberating with opinions and voices touching upon significant aspects of India’s economic future.

The day that started off on a high note with none other than the Union finance minister Arun Jaitley pressing for the need to roll out the Goods and Services Tax (GST) before September 1, if not from April 1. He stressed that it was a Constitutional necessity to roll out the new tax regime as the amendments have already been made and accepted.

Right ahead of Union Budget, the Vibrant Summit, which in true sense has catapulted into assuming a national stature (with the PM himself canvassing for the country using the platform), industry representatives present here spoke about their expectations.

Naushad Forbes, president, Confederation of Indian Industry (CII), said here on Wednesday that the association has recommended an 18 per cent corporate tax rate and a removal of all exemptions and concessions. "No need for grandfathering existing incentives. 18 per cent is the MAT rate in any case, and as such the larger firms take advantage of the exemptions and concessions. Smaller firms pay somewhere around 34 per cent." Going for 18 per cent for everyone would be progressive, CII felt. Forbes further said that the way in which corporate tax rates are implemented is regressive.

He added that CII expects some changes in the corporate and income taxes in the upcoming Union Budget, some of that would be reflection of the formalisation of the economy from demonetisation.

Demonetisation, obviously, was another key theme as the audiences and the media pestered the noted speakers on the potential impact of Centre’s ambitious move on the economy at large.

Venkaiah Naidu, Union minister for urban development, said that it is like a “bitter pill for tackling some ills of our society.” Describing this as a radical transformational measure, he went on to add that people have shown monumental resilience in the face of this challenge taken up by the Prime Minister against the black money. The minister expects this measure to lead to identification of those who deposited the black money leading to increased tax base.

Jaitley too added, "India needs bold decisions. It can be understood that difficult decisions initially pass through difficult phases but it is ultimately help us to improve the country."

With Gujarat evolving as the next big auto hub in the country, industry representatives felt that there was a need to get a dedicated automotive policy. V Mehta, director general, Automotive Component Manufacturers Association of India (ACMA) said that while some states like Tamil Nadu, Karnataka and now even Uttar Pradesh (which is working on one) have a dedicated policy, it was time Gujarat had one. “A dedicated policy would ensure that the incentives are extended to ancillary units as well; otherwise only the big units end up getting the incentives,” he added.

You know there is a lot of brainstorming at any Summit, when new ‘isms’ are coined. For instance, Naidu said that the “PM is not for freebies; he wants ‘people-ism’ – better life to people, instead of populism.”

The people at the Summit, on the other hand, were kept entertained with a live army band playing popular Hindi film tunes as they took ‘selfies’ standing on the iconic walkway at Mahatma Mandir, called the Dandi Bridge.

If that was not all, they could indulge themselves with some ‘Modi-styled’ kurtas from the Prime Minister’s select tailor and leading lifestyle store-chain in Gujarat, Jade Blue. Not just Indians, but foreigners too were seen queuing up at the make-shift stall which was selling its trademark ‘Modi Kurta’ and ‘Modi Jacket’ (both registered brands) for Rs 1,595 and Rs 5,900 a piece respectively.

For some, however, brushing shoulders with Nobel Laureates was the high point of the Summit. Sunil Parekh, strategic advisor to Cadila Healthcare and Jubilant Group, was beaming with pride post his recent tete-a-tete with the Nobel dignitaries.