GST most crucial economic reform, says new Assocham president

Sunil Kanoria says GDP can rise by 1-1.5% on the basis of implementation of GST itself

Successfully passing the Goods and Services Tax (GST) bill should be the first priority of the lawmakers across parties, the new president of industry body Assocham, Sunil Kanoria said on Thursday.

Speaking at a press briefing a day after talking charge, Kanoria said speedy implementation of a fair GST regime which was beneficial for both industry and common people is the most important economic reform the country can undertake at this juncture.

The winter session of parliament, which began on the same day is set to discuss the GST bill, which had been consistently blocked by principal opposition Congress party who had initially authored the legislation.

Kanoria said it was difficult for economic growth in the current fiscal to reach the government’s expectations of a 7.8% rise in Gross Domestic Product (GDP), instead stressing it will be a maximum of a 7-7.3% rise.

However, he said GST might also help out in this regard. “Our GDP growth can rise by 1-1.5% by GST alone, going up to 9% by 2018-19”, he said. However, he maintained it should be passed in an equitable form. He said the GST rate, which according to recent reports is going to be settled on 18% was fair.

He added stipulation of additional 1% duty would not help industry.

On the present state of the economy, the president said one of the main worrying aspects is lack of appetite for fresh investment which is further discouraged by lack of demand as is evident from the latest IIP numbers showing the slowest growth industrial output in four months (3.6%) during September.

Kanoria, who is Vice Chairman and Managing Director of SREI Infrastructure Finance, said promising reforms have however been made in the road sector where a marked rise in public investment will stimulate private investments by the coming year.

On another serious issue of bank NPAs, he said, “We cannot afford to delay the full recapitalisation of the banks while concerted efforts should continue to address the structural problems of the sector like steel, power, roads, highways where the maximum level of stress assets is locked up."

In this regard, he argued for the Bankruptcy Law to be passed urgently for assets locked in bad loans to be released and given to new promoters.

In response to a question on the raging issue of growing intolerance in the country, Kanoria said stray incidences should not merit enough importance to paint India as intolerant.