Jaitley: New tax law, reforms can support sagging world economy

Finance Minister Arun Jaitley on Sunday expressed the hope that the long-pending Constitution Amendment Bill for GST (goods and services tax) and the Insolvency Code will be passed by Parliament in the second half of the Budget session.

“The next few months are important… We hope to see the GST and the Insolvency Bills cleared by Parliament in the second half of the Budget session,” he said at the concluding session of the Advancing Asia conference of the International Monetary Fund.

Noting that the current session of the Lok Sabha has already cleared the “landmark” Aadhaar Bill, he said India can, with new laws and reforms, provide a significant amount of support to the sagging world economic growth.

“We are trying to have special emphasis now both in terms of legislative changes and resources being put to strengthen the banking system,” Jaitley said, adding that the government’s emphasis is also to fill in “pits” in various sectors.

Accordingly, the emphasis is now on rural areas, building physical infrastructure and making higher allocations to social sectors. Stating that India has its own share of problems, Jaitley said there was increased determination in the country to face the challenges and accelerate the pace of reforms so as to continue to grow.

Reforms at IMF Meanwhile, a day after Prime Minister Narendra Modi pitched for more reforms at the multilateral agency, IMF Managing Director Christine Lagarde said the next round of quota and governance reforms at the IMF will be taken up in some time.

“IMF has just completed the quota reform. It was an in-depth series of changes, which are not sufficient. The quota review is a continuous momentum. We will be at it over and over, because it has to mirror the state of the economy,” she told newspersons at the end of the two-and-a-half day conference. Lagarde also said India’s banking sector is well capitalised and appreciated efforts to resolve the problem of non-performing assets. “The Reserve Bank of India Governor addressing banks balance-sheets is absolutely right,” she said, adding that the Finance Minister is also addressing it by pushing the bankruptcy law in Parliament.

She further said the Indian economy can continue to grow at over 7 per cent despite the global slowdown due to its scale of market, growing population and determination to pursue reforms. “There is a huge potential for growth,” she stressed.

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