A long talk was conducted recently with the President of Assocham Mr. Sunil Kanoria regarding the benefits and upliftments of Goods and Service Tax. He said that “By unifying all Indian states and Union Territories into a common market, GST will exponentially enhance the ‘ease of doing business’ for them and this can unleash India’s huge domestic potential.”
When asked about the implications of the GST and its effects on the economy, he said that “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.”
It was also thought that inflation like the situation will increase after the GST implementation, and on this term, Mr. Sunil said that “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 stabilize.”
A specific point regarding the banking system and its worst plagiarism of NPA’s was kept in front of the President and on this matter he said that “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 capitalizing on the window of opportunity that has opened up due to global conditions. At this stage, the priority should be on how to capitalize 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.”
And about the bad performance of private sector investments, he showed some points like, “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.”
And after every issue being discussed, the serious issue was taken then asked about the future economic conditions of the nation on which Mr. Sunil mentioned that, “I am upbeat about the prospects of the economy. The progress made on the GST and the Insolvency & Bankruptcy Code fronts need 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 programs 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.”
