India has potential to grow faster and plans are underway to reduce poverty and create jobs in rural areas, Finance Minister Arun Jaitley said on Monday, even as he ruled out the country becoming totally ‘cashless’ immediately.
“One of the reasons for note ban was tax non-compliant. One of the objectives of the demonetisation was to reduce and eliminate anonymity. I don’t see India becoming a cashless system immediately. I see India becoming less-cash economy,” Jaitley told the news agency here.
The Finance Minister, who is meeting top Government officials and business leaders here, further said the GST regime would also make generation of cash more difficult, besides making the taxation system much more efficient.
He hoped that the GST would be implemented by July 1.
On the Centre’s efforts to move towards digitalisation and cash-less regime, he said, “Major business, property transactions, salary payments, and school fees will be done through cash-less system. Will it be totally cash-lessIJ I don’t see it happening immediately.”
Talking about retrospective taxation, the Finance Minister said the Government has decided not to resort to such measures and the existing disputes are being sorted out either bilaterally or through the judicial system.
“India still has the potential to grow at a higher rate than today. A series of action is needed to reduce poverty in the rural areas. We have planned several programmes for rural India coupled with measures to create jobs,” Jaitley said.
“Today, India is one of the most open economies of the world. While the world is turning protectionist, India is opening up more,” he added.
On the Goods and Services Tax (GST) roll-out, the FM said, “The first requirement is constitutional amendment, the law has been passed unanimously and by September 15, 2017 the curtain will be down. We have resolved most of the critical issues. legislations have been drafted. Two weeks ago, we approved the first draft. By March first week, the second draft will come up. Parliament will be resuming from march 9.”
The Finance Minister said, “Despite teething problems, hopefully GST will come up for implementation by July 1. The entire process has to be completed by September 15. At the moment, it is the biggest tax reform since Independence. Once implemented, it will be far more efficient tax system. The quantum of taxation will go up. GST will make generation of cash more difficult.”
Defending the government surprise move to ban old Rs 500/1,000 notes in last November, Jaitley said “one of the reasons for note ban was tax non-compliant. One of the objectives of the demonetisation was to reduce and eliminate anonymity... Today there is much greater support for any reform in India.”
On trade deal with the UK, the FM said “in my discussion with my counterpart here, he clearly convinced me that Brexit should not be confused with protectionism”.
