Chief Economic Advisor Arvind Subramanian on Thursday told CNBC-TV18 that managing demonetisation remains a challenge for the next two months. “Macroeconomic conditions remain stable, inflation remains muted and current account deficit (CAD) is also narrow,” he said. He also said that the Indian economy is “well cushioned” to absorb the impact of US Federal Reserve’s rate hike. “India is seen as better equipped than its other emerging market peers to weather the impact of higher US interest rates because of its stronger economic growth and record high foreign exchange reserves of more than $300 billion.”
Talking about GST he said, “The proposed Goods and Services Tax (GST) is the mother of all achievements”. “We should aspire for a simple structure for GST with lower rates”. We face the risk of missing a self-imposed deadline to launch the GST from April 2017, Subramanian said, after a meeting of officials ended last Sunday without fixing who would administer the tax. Subramanian, who headed a panel on the proposed tax structure, said that GST should also include real estate, land sales and electricity as well.
Amid concerns of missing the GST rollout deadline of April 1, the government, yesterday, came out with a report card detailing the efforts being made to reach a consensus on support legislations for timely implementation of the new indirect tax regime. “All efforts are being made to meet the necessary deadlines to ensure that GST is rolled out by April 1, 2017,” said the Finance Ministry’s report card on GST implementation. The GST Council, which took over the job of rolling out the new indirect tax regime after the Parliament passed the Constitutional amendment and half of the states ratified it, has taken major decision on fixing tax rates, compensation to states and threshold of exemption.
“At present, agenda items pertaining to GST related draft laws and provisions for cross empowerment to ensure single interface under GST are under consideration of the GST Council. The last GST Council meeting on December 11 could not find time to discuss the all important issue of cross-empowerment.