India needs competitive tax rates to become an attractive manufacturing hub that will help create jobs and boost economic growth, Finance Minister Arun Jaitley said today.
"Manufacturing is not only extremely important activity but it is one activity with its spiral effect on the economy which also creates the largest volumes of job, and a tax on that manufacturing adds to the government revenue.
"In order to keep manufacturing competitive we have to keep our rates competitive and therefore have to occasionally vary those rates...," he said at the Investiture Ceremony 2016 and Annual Central Excise Custom Day Function.
He said the revenue is the lifeline of governance and if governments have no adequate revenue, it becomes almost impossible for government to function.
"As the economies grow, not only the width of revenue grows but the expectation of people for greater level of developments, evolution of society as welfare state also grows. Manufacturing in any growing economy has a very vital role," Jaitley said.
He said the efficiency of excise department is critical to make sure that "what is due from each producer or manufacturer to the country is realised by us (Government)".
He further said because of some "clever manufacturers" who try to avoid paying right taxes, it was necessary that the excise department remains vigilant, uses intelligence, and has a keen technological know-how with the highest level of integrity and professionalism.
In order to promote digital banking a task force is being
set-up under Anil Kumar Khachi, Additional Secretary in Department of Financial Services, which is going to oversee this entire exercise, especially with regard to POS machines, Jaitley said.
Observing that there has been expansion in debit cards, e-wallets and other modes of transactions in the last few years, he said there has also been a series of mobile apps that have come up which facilitate payment.
"When we look at the figure we see that the change is already taking place and the present exercise gives us great opportunity to catalyse that change at a greater speed," he said.
So, the Finance Ministry has emphasised to the banks that this is a great business opportunity for them because a lot more transactions are going to come into the banking system, he said, adding therefore, they have to take it up with their existing customers and others on a mission mode.
In this direction, most banks have already begun a promotional exercise by waiving-up to end December MDR charges on debit cards, he said.
Banks will now be focusing on significantly stepping-up transactions in mission mode through alternate banking channels such as NEFT, mobile wallets, pre-paid cards, QR (Quick Response) codes, pay-roll cards, debit and credit cards and Unified Payments Interface (UPI).
Besides, Indian Banks' Association (IBA) has been asked to promote digital transaction through advertising campaign including demonstration videos on how to use cards and other modes for cash less transactions.
During the video conferencing with heads of the banks, the Finance Minister exhorted lenders to restart normal lending activities and in particular Mudra loans as the rush at bank branches is now reducing.
These would help meet restocking requirements of enterprises by way of working capital delivered through Mudra cards, he added.
With regard to rural lending, Jaitley said, sowing season for Rabi and crops like potato is currently underway in many States.
"Necessary resources for the purpose have been provided by NABARD and daily releases to DCCBs (District Co-operative Banks) are a focus area of monitoring," he said.
