Single GST rate would have been disastrous; bank, investment revival the ‘bull's eye’ now: FM

As India enters the final lap in preparation of the rollout of the Goods and Services Tax, Finance Minister Arun Jaitley expressed confidence in the proposed multi-tier GST rate structure and said he saw no reason why the tax should not be rolled out on July 1.

In an hour-long interview with CNBC-TV18’s Shereen Bhan, the FM discussed a whole host of issues, ranking from GST to NPAs and demonetisation to GDP growth.

GST

The FM defended GST’s four-slab rate structure, which some experts have said undermines the tax’s simplicity, and said it was prepared keeping ‘economic realities in mind’.

The FM has, in the past, said the aim of the GST Council, the all-powerful body of union and state finance ministers, was to align GST rates with existing tax rates as closely as possible so as to ensure minimal disruption.

Still, Jaitley said tax rates for several commonly-used items would fall. “Footwear tax has been brought down. Tax rate for marble, granite has been lowered. The entertainment tax weighted average currently is 29.1 percent. The GST rate is 28 percent,” he said.

The GST Council will host a meeting on June 11 to discuss outstanding issues and go through final representations made by stakeholders.

Talking about GST Network, he said the technology body, which powers the infrastructure for the tax, is also ‘extremely confident’ of July 1 rollout of the indirect tax regime, even as some industry voices have expressed concern GST is being rushed through.

Jaitley also defended the GSTN’s structure, built as a private-sector company, and whose shareholding structure has been questioned by some, including maverick leader Subramanian Swamy.

“The GSTN structure was decided by the UPA government. We reviewed it and saw no reason to disagree,” FM said. “The structure allows them to hire the best professionals. The government has a veto on GSTN decisions and a majority on the board. We have passed an order to allow CAG audit for GSTN.”

Fight against NPAs

The FM’s next target – the ‘bulls eye’ -- is to finally defeat the NPA problem, which the government has been grappling with for all of its three-year tenure so far.

In light of the bankruptcy code and the Reserve Bank of India’s recent decision giving itself powers to intervene in cases of high debt, the FM said a list of defaulters has been prepared.

“The list of companies, which will be selected in the first instance for invoking the insolvency code, is almost ready. The RBI should put out the details soon,” he said.

He expressed caution on the state of telecom sector, which has been reeling under intense competition, and said he hoped ‘telecom would not be the next steel’. “The regulator should ensure fair competition in the sector,” he said.

Demonetisation

Terming the note ban as one of the ‘best decisions’ taken by the country, the FM said the recent dip in GDP growth was not just because of the move.

“The pace of growth was dropping prior to demonetization. FY17 was not a 8 percent growth year,” he said, adding that demonetization helped speed up digitization in India and created an ecosystem to curb black money.

Air India

On lossmaking Air India, the FM said the government will take a decision on the national carrier after the Aviation Ministry made a recommendation on the NITI Aayog report that called for its privatisation.

“I met with the Aviation Minister and [PM’s secretary] Nripendra Misra to take stock of Air India’s immovable properties.”

He added that the best time to have sold Air India was a ‘decade and a half ago’ -- when the Indian economy was taking off for a multi-year boom.