Jaitley blames Congress for delay in GST rollout

India has an opportunity to become a global manufacturing hub as China vacates the space

Arun Jaitley
BS Reporter New Delhi
Last Updated : Aug 06 2015 | 2:14 AM IST
Finance Minister Arun Jaitley on Wednesday blamed the Congress Party for coming in the way of high economic expansion by blocking goods and services tax (GST) rollout, saying the new indirect taxation regime could push the GDP growth by 1-2 percentage points.

India has an opportunity to become a global manufacturing hub as China vacates the space, he said. In reply to a debate on supplementary demand for grants in the Lok Sabha, Jaitley said the economy can see eight per cent growth as the government is taking a host of steps to boost investment besides reviving stalled projects and pumping in more funds into public sector banks.

In addition, "Rain Gods have been kinder this year, which is expected result in a good harvest," he said. As the Congress staged a walk-out, the finance minister said: "If my friends (in the Congress), who are not present in the House today, allow implementation of GST, which was introduced by the Congress, you will have a uniform tax rate, one market and it is capable of boosting economy by 1-2 per cent."

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He added: "In adverse situation, we can touch eight per cent if banks are capitalised, GST implemented, stalled projects revived and infrastructure spending improves."

The Constitution amendment Bill, which proposes to usher in a uniform indirect taxation system throughout the country, is stuck in the Rajya Sabha, which is unable to function because of Opposition protests over various issues. Turning to China, which has been the world's fastest growing economy, Jaitley said it has slowed and its wage bills have gone up, pushing up the cost of its products.

In this context, Jaitley said: "It is for us to become a manufacturing hub. It is then the Indian economy will achieve full potential." The finance minister said that India, which is targeting to grow by eight per cent in a sustained manner, is a "bright spot" among the global economies. India grew at 7.3 per cent last year and the Reserve Bank of India (RBI) has projected this year's growth to be 7.6 per cent.

"In the past few years, we have come down to reasonably bottom pit... Under Prime Minister Narendra Modi's leadership, we are reviving the economy and it is the responsibility of all of us to cooperate to enhance (India's) growth rate," said Jaitley.

The House later passed the supplementary demand for grants. The House also passed the Delhi High Court (Amendment) Bill, 2015.

Finance Minister Arun Jaitley on Wednesday demanded that the Congress explain its position on party member Mani Shankar Aiyar's view that alcohol be included within the ambit of the goods and services tax (GST).

"He (Aiyar) believes that liquor should be brought within the GST instead of leaving it to the taxing purview of the states so that it can be taxed at the Constitutional limit of 18 per cent that the Congress party now proposes," said Jaitley.

According to Aiyar, alcohol for human consumption is taxed at a very high rate by the state governments and to avoid costly alcohol, people resort to 'hooch'. This results in revenue loss, malpractices and even leads to the death of many people caught in the web of illicit liquor, Aiyar said on his blog.

"If Mani's blog is to be believed, the Congress party's position is to make alcohol cheaper so that people do not resort to 'hooch'. Is this the Congress party's concept of a comprehensive GST that alcohol becomes cheaper? Is this among the basis for Congress party's opposition to the GST? I hope the Congress party either clarifies its position or confirms Mani's view," Jaitley said.

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First Published: Aug 06 2015 | 12:20 AM IST

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