Less-cash economy and uniform GST top government priorities: FM Arun Jaitley

NEW DELHI: Prime Minister Narendra Modi’s government is determined to leave a mark as it forges ahead with all measures necessary to achieve a more transparent and less corrupt society, even it if means stepping on a few toes and short-term pain for citizens, Finance Minister Arun Jaitley said.

Moving to a “less-cash” economy and a uniform goods and services tax (GST) tops the government’s agenda despite political opposition, he said at the power-packed ET Awards for Corporate Excellence in Mumbai on Saturday that was attended by a galaxy of business stars and top ministers.

The government’s experience with reforms shows that they create enormous goodwill by challenging the status quo even though they draw the ire of vested interests, Jaitley said.

“We are a deeply conservative society, we are a religious society, we are wedded to family values, we are socially very traditional but we never regarded tax non-compliance as something immoral,” Jaitley told the audience.

“Therefore, a time had to come when a Prime Minister had to decide that do I spend my years in office and be remembered for the number of years I spend in office and preside every Wednesday over a cabinet meeting, (address) some rallies across the country, inaugurate some bridges and highways.”

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Modi has ruffled feathers, including those of West Bengal Chief Minister Mamata Banerjee, following his November 8 announcement that Rs 500 and Rs 1,000 notes would cease to be legal tender. That’s aimed at rooting out black money and moving to a cashless economy in which transactions can be tracked, thus lifting tax collections and ensuring that credit flows to the less privileged.

“Everybody, including me, has been inconvenienced,” Jaitley said.

The government has transformed the nation’s thinking, including the way subsidies are regarded and how public funds are allocated to development schemes.

The government’s focus will be on infrastructure development as it attempts to compensate for the lack of private investment, unlike the past when actual expenses were lower than budgetary estimates.

“The last two years are an exception where not only a lot of infrastructure spending has taken place, the revised estimates last year were in excess of budget estimates,” he said. “Having presented the second supplementary this year, it also promises to be significantly higher and therefore we are already on a track where we are spending more on development rather than give a lofty figure in the budget and start cutting in the course of the year.”

Political opponents won’t be able to halt the implementation of GST as it legally needs to be in place by September next year. Any state that does not approve GST will be the loser, he said.

“I am conscious of the fact that the current political attitude of some is an attempt to also delay the GST,” said Jaitley. “But fortunately for this country, the constitutional mandate is very clear. From the day the amendment is notified, the old taxation regime can continue for one year.

Nobody has the luxury of time to be in a position to pressurise if not blackmail and say I will have it deferred. The constitution today mandates that GST has to come into place before September 16, 2017, and for those who don’t do it in their states will lose the right to collect taxes.”


(In pic: Some of India Inc’s top CEOs at the award ceremony)