The pace of reforms has slowed down and the economy is not doing as well was it was expected to, the head of Confederation of Indian Industries (CII) said, adding the delay in parliament passing a critical new tax law was disappointing.
“It (the economy) should have done a lot better. It can do a lot better. A reform like the GST (Goods and Services Tax) would give the whole industry such a psychological boost that you would see a rapid pack of pick up in the economy,” Sumit Mazumder told PTI in an interview.
He said it wasn’t that economic reforms had completely stopped, but there was a slowdown.
“GST has been a huge disappointment because everybody recognises the benefits of GST, on how the GDP will be impacted positively and ease of doing business will go up by quite a few notches,” he said.
Mazumder said the parliamentary logjam over GST “has been a very big disappointment and sometimes you have got to draw a line between politics and what is good for the country.”
The proposed GST law that will subsume all indirect taxes like excise duty, service tax and sales tax into one uniform rate, is stuck in the Rajya Sabha where the government lacks majority.
The opposition Congress is demanding three major changes in the bill and stalled the passage of the Constitution Amendment Bill in the last two sessions, derailing government’s plan to roll out GST from April 1, 2016.
Mazumder told PTI that a major thrust is required by the government to stimulate rural demand and boost infrastructure development. He also urged that the phased corporate tax reduction to 25 per cent from the prevailing 30 per cent be done in tandem with removal of allowances.
He said the industry would want the finance minister to steps to boost demand, which was a major concern right at this point.
“We would like to see continuation of investments that are being made by the government right now and by the PSUs. However, the fiscal deficit must be maintained, that should not be sacrificed and one of the ways to do it would be through disinvestment. We want to see a lot more impetus on infrastructure and construction,” Mazumder said.