Goods and Services Tax Holds Key to Growth

The Goods and Services Tax (GST) is a reforms initiative that seeks to replace all indirect taxes levied on goods and services by the Centre and States and make it comprehensive for most goods and services. Some of the States have been resisting it on the ground that it would infringe on their financial autonomy.

CII feels that introduction of the contentious GST is a high priority area for the country to improve its economic growth and gross domestic product (GDP). It will also exert pressure on the States opposing it to agree to its implementation.

With the CII concluding that accelerated economic growth is vital in the present circumstances, CII’s new President, S Gopalakrishnan, stressed that reforms like implementation of the GST was a must.

“It is a high priority area. If GST comes into force, it will add at least 1.2 per cent to the GDP. We have met several chief ministers and we are hopeful to convince them”, he said.

The CII president said with moderation of inflation rates, check on fiscal deficit and positive outlook on current account deficit suggest that a growth percentage of around 6.2 per cent was achievable in 2013-14.

Gujarat needs to retain talent for growth of IT sector

CII has contemplated a task group in the state of Gujarat for the Service and IT industry and will work on ways to achieve higher growth rate in these sectors.

It’s not that every state can have excellent growth in each and every sector of the economy. Every state has their own strengths.

If you look at the agriculture sector in Gujarat, it has achieved around 10 per cent rate of growth for past ten years. This is fabulous. But to increase the growth rate of state gross domestic product (SGDP), Gujarat could also look at the IT sector.

CII has also discussed the Goods and Services Tax (GST) issue with Modi and It has been a top priority of CII to play an active role in creating the right atmosphere for the implementation of GST.

The drivers for growth would be reforms and governance, inclusive growth and affirmative action, innovation, entrepreneurship and growth of MSMEs and transformation of sectors.

S Gopalakrishnan, President, CII and Co-Founder and Executive Co-Chairman, Infosys, who was in the state for an interactive meet of CII members, also had a meeting with Chief Minister Narendra Modi.