Reforms absolutely must to push growth above 8%: Das
The pace of economic reforms will continue and efforts will be made to get the GST and bankruptcy legislations approved by Parliament expeditiously with a view to pushing growth to over 8 per cent, the Government on Wednesday said. “If we have to cross 8 per cent growth next year... reforms are absolutely essential. GST, bankruptcy and insolvency laws are very important in accelerating growth to over 8 per cent,” Economic Affairs Secretary Shaktikanta Das said at the CII National Council meeting here.
The goods and services tax (GST) Bill is stuck in a political logjam in the Rajya Sabha. The bankruptcy and insolvency Bill is being vetted by a joint committee of Parliament. The economic survey has projected growth to rise to 7-7.75 per cent next fiscal, from the 7.6 per cent this year.
“We expect that slowly investment climate will revive and expenditure on infrastructure and rural (India) will create sustained domestic demand,” Das said. He said that as part of non-tax revenue mobilisation, the government will continue with the process of special dividend as PSUs cannot be allowed to sit on idle cash.
“We partly use this during the year... The government has a right to take that (idle cash) as special dividend and use them for funding bank recapitalisation, creating assets and investing in infrastructure,” Das added. According to the Secretary, the strategic stake sale policy has been put in place and efforts would be made to raise Rs 20,500 crore from such sale.
Besides, the Budget has announced that CPSEs will be encouraged to monetise idle assets to fund their investments. “CPSEs would be encouraged to divest their subsidiaries so that they are able to unlock funds for fresh investment,” Das added.
On banking sector reforms, he said the government has given clear assurance of supporting PSBs and if needed, more capital will be provided to banks. “In a budget of Rs 19.8 lakh crore, it is not difficult to find Rs 6,000-7,000 crore extra (for PSB recapitalisation),” Das added. He termed the anticipated revenue growth of 11.7 per cent in the next fiscal as “realistic”.
“The revenue projections do not include the amount that would come through disclosure under (black money) compliance window and also the dispute resolution mechanism,” he explained.
The Budget has proposed a 4-month window ending September for disclosure of assets by domestic black money holders. Also, it has proposed a one-time dispute resolution mechanism for settling multi-billion dollar tax disputes arising from retrospective amendments to tax laws.
Just 18,913 ha of SEZs’ total notified area of 45,883 ha utilised till date
Of the total notified area of 45,883 hectares covering 347 special economic zones (SEZ), only 18,913 hectares has been utilised for their development, Parliament was informed on Wednesday. “The reasons for delay in operationalisation of SEZs may, inter alia, be attributed to downward trend in the industries during the recent past, imposition of MAT and DDT by the government etc,” Commerce and Industry Minister Nirmala Sitharaman said in the Rajya Sabha. Out of the total notified area of 45,883.58 hectares in respect of 347 notified SEZs — including 7 central government SEZs and 11 state/private sector SEZs set up prior to the enactment of the SEZ Act, 2005 — 18,913.21 hectares of land has been utilised for the development of SEZs, she said. In a separate reply on India-EU free trade agreement, the minister said two stocktaking meetings have been held recently and both the sides have re-engaged in discussion to address the key outstanding issues.
Top officials of India and the European Union (EU) have met on February 22 in Brussels to review the stalled negotiations for the proposed free trade agreement. On January 18 also, chief negotiators of both the regions took stock of the outstanding issues, including duty cut on automobiles and movement of professionals. The purpose of the meeting was to assess where both sides stand and how India and the EU should go forward with the proposed pact, officially dubbed as Bilateral Trade and Investment agreement. In a separate reply, she said 133 license for manufacturing various items were issued during the last 2 years under defence and chemical sectors. “The employment expected to be generated in these projects is 35,169 mandays,” she said.