Promising more reforms, Finance Minister Arun Jaitley on Thursday said efforts are being made to “put to sleep” pending taxation issues to attract investments and make fundamentals of the economy sound so that it can withstand the global turmoil.
Addressing a gathering of industry leaders at the India Economic Convention 2015, the Minister said a number of taxation issues have been put to rest and the endeavour is to put to sleep the remaining ones.
Regretting that the Goods and Services Tax (GST) got stuck because of political reasons, Jaitley said, “many reforms (are) in pipeline”.
In order to promote ease of doing business, he said the government is working on areas like bankruptcy code, disputes resolution in major contracts, expeditious arbitration proceedings and a public procurement law.
“These are (reforms)… which we are trying to put on track,” Jaitley added.
Refering to the fast-changing global financial situation, the Minister said, “In a situation when there is a turmoil by the day… we are trying to make the fundamentals of our economy a little sound so that our ability to resist changes substantially increases.
“And once we are able to walk on this growth track, I am quite certain that the architecture of growth for India would be settled, strong and deep.”
The Minister also underlined the need for improvement in the regulatory environment saying, the regulatory system has to be prepared for a much faster change.
Observing that ease of doing business is work in progress, Jaitley said: “Today, there is no sector of economy which is saying I am being harassed. The procedures have been rationalised. But then, the entire regulatory and other systems have to prepare themselves much faster for this change.”
As for taxation, he said, “A number of them (pending disputes) have been put to rest and we are trying over the next few days so that many others can be put to sleep either by a judicial resolution or by an executive resolution.”
He further said the government has rationalised the system of allocation of natural resources. “We have done away with the controversies,” Jaitley asserted.
The Minister also underlined the need for kick-starting the manufacturing sector and giving a boost to small and medium enterprises with a view to generating more jobs. The efforts include increasing public investment and streamlining the foreign direct investment (FDI) regime.
“Kick-starting our manufacturing sector and its growth rate… is one of the various challenges to the Indian economy today. If we can handle that problem, its ability to absorb a number of people coming from rural India and adding to India’s growth story is going to be much larger,” Jaitley said.
The focus of the government, the Minister said, is also on the agriculture sector, which is largely rain-fed and provides livelihood to 55 per cent of the population.
“Our agriculture sector is dependent on rain. Our rain-fed area is huge and therefore, always continues to be fragile. Its fragility is added by the fact that for 15 per cent of our income, 55 per cent of our population depends on it.
“… there is a need to restructure the Indian model whereby lesser number of people have to be employed in the agriculture sector and more will have to be diverted to other sectors of economy. In order to divert more people to other sectors of economy, you would need fast-growing services sector, you would need more urban, sub-urban centres, and you would need a very vibrant manufacturing sector,” he added.