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Introduction of GST critical for economic reforms: Pranab

Introduction of GST critical for economic reforms: Pranab
PTI
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First Published: Thu, Jun 11 2009. 02 23 PM IST
Updated: Thu, Jun 11 2009. 02 23 PM IST
New Delhi: Asking the state finance ministers to resolve the pending issues expeditiously, the Centre today said that introducing Goods and Services Tax (GST) was critical for economic reforms.
“We also need to focus on the introduction of GST from 1 April, 2010. This is a critical part of our economic reforms,” finance minister Pranab Mukherjee said while addressing a conference of state finance ministers.
Requesting the chief ministers and state finance ministers to resolve the pending issues expeditiously, Mukherjee said: “As in the case of VAT, the Centre continues to play the role of a facilitator for GST also.”
The new tax system GST is expected to replace most indirect taxes at the central and state levels.
Mukherjee further said that as the states had agreed on eliminating double benefits under the VAT and Central Sales Tax (CST) compensation packages, the central government has issued relevant circulars.
The Centre had earlier agreed to compensate the states for loss of revenue following the implementation of VAT and gradual reduction of CST rate.
Calling upon the states to focus on Aam Aadmi, Mukherjee said: “We have to ensure that the growth process is not only accelerated but also made inclusive. We need to give full attention to sectors like infrastructure, agriculture, employment generation etc.”
Raising concern over deterioration of the centre’s fiscal deficit which soared to 6.2% of GDP in 2008-09, Mukherjee said: “High levels of fiscal deficit are not sustainable in the medium to long term, both for the states and the centre.”
Making a case for brining back the economy on higher growth trajectory without fiscal profligacy, he said: “We have to resume the process of fiscal consolidation at the earliest.”
Referring to the 6.7% growth rate during 2008-09, the minister said: “India is the second-fastest growing economy in the world,” adding: “Moreover the recent performance of the core sector industries, including crude oil, coal, cement and steel, during April 2009 gives us further confidence of bringing back the economy on growth path.”
Recalling the social sector initiatives taken by the central government to make the growth more inclusive, Mukherjee said that the cabinet secretary would be holding periodic video conferences with the chief secretaries to monitor the progress of the schemes.
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First Published: Thu, Jun 11 2009. 02 23 PM IST