There is no major hurdle in implementing the Goods and Services Tax by July 1, said Arjun Ram Meghwal, Union Minister of State for Finance and Corporate Affairs.
Speaking to Moneycontrol, Meghwal said that the states were co-operating and that all the required procedures for the rollout of the new indirect tax regime should be completed in time.
In a wide-ranging interview, the minister spoke about the impact of November’s note ban on the economy and had a message for the new SEBI chairman:
Q: The disinvestment target has increased to Rs 72,000 crore for 2017-18. In addition, the minimum public shareholding deadline for public sector undertakings is only months away. How will you achieve these targets?
A: We have created a roadmap for achieving minimum public shareholding. Last year, we divested stake worth Rs 30,000 crore in various companies. Our government’s track record is much better than our predecessors. We are divesting stake in a transparent way and after consulting with various departments.
Q: The government is pushing for digital transactions, but the banking transaction cost is high. How will you incentivise digital transactions and how will people from rural areas transact digitally considering there is limited internet penetration?
A: We have been pushing for digitalisation since coming to power. Most panchayats have access to the internet and there will be 100 percent penetration soon, with work for laying fiber optic cables going on in full swing. The younger generation has already started moving towards digital transactions. As far as I know, more than 60 percent of petrol pump transactions are happening digitally in some states, which shows that people are embracing this mode of payment.
Q: The government’s decision to ban high-value currency has been widely criticised. What is your defence of the move?
A: As far as I know, the people have welcomed this move. Our cash to Gross Domestic Product ratio is 12 percent, which has to come down. In developed countries, this ratio is around 4 percent. We have not decided any target yet but we certainly cannot be comfortable with this level if we wish to grow at a much faster pace. Apart from weeding out black money, the note ban also dried up terrorism funding.
Q: The government announced the Garib Kalyan Yojana amnesty scheme shortly after the note ban was announced. What has been the response to this initiative?
A: The traction has been good. More importantly, 25 percent of the money which we are investing in Garib Kalyan Yojana will be used in some untouched sectors, including developing infrastructure in the border areas. The money will also be used for rural and urban infrastructure and for skilling people. Apart from Garib Kalyan Yojana, the funds for this will come from efforts to widen the tax net and improve the cash to GDP ratio.
Q: What do you think are the main challenges for the new SEBI Chairman Ajay Tyagi?
A: The Indian market should be price-setter and stop being a price taker. The new Chairman should work to achieve this, which I’m sure is already on his agenda.
Q: The Prime Minister has spoken about there being more speculation in the market than investment. How will you change this dynamic?
A: In his speeches at the National Institute of Securities Markets and GIFT City, the Prime Minister laid out a roadmap for the capital market. We are currently working on generating jobs from the capital market.
Q: The Budget announced an integration of the spot and derivative commodity markets. Has any timeline been fixed?
A: It is on our priority list. We expect the regulator to complete this integration in a short time.