Rollout of GST reforms to bring transparent economy: FM Sitharaman

The planned roll out of goods and services tax (GST) reforms will lead to an open and transparent economy and further reduce compliance burden, making it easier for small businesses to thrive, Finance Minister Nirmala Sitharaman said on Tuesday ahead of the GST Council meeting. 

The 56th GST Council meeting, scheduled for September 3-4 in New Delhi, is set to discuss one of the biggest tax overhauls since the GST regime was rolled out in 2017.

 

Speaking at the 120th Foundation Day Celebrations of City Union Bank in Chennai, the FM called upon banks to not only expand credit, but provide momentum for infrastructure development through trust, technology and transparency. Sitharaman said that all banks should ensure timely and need-based funding for MSMEs, bringing the unbanked into the fold of formal banking.

 

“The macro stress tests have shown that aggregate capital levels of the scheduled commercial banks will continue to remain above, regulatory minimum, even under these adverse stresses,” the finance minister said.

 

Highlighting the critical role of the private sector banks in India's nation building efforts, Sitharaman said that the Indian scheduled commercial banks have recorded a massive improvement in their asset quality with gross non-performing assets at a decadal low of 2.3 per cent. 

“At a time which is so challenging as this, for our banks to achieve this is phenomenal,” the FM added.

 

The finance minister highlighted the recent first quarter GDP numbers with India achieving 7.8 per cent growth rate, “beating all estimates and showing overall good momentum across various sectors.”

 

Sitharaman said Prime Minister Narendra Modi recently announced the creation of a task force for next generation reforms with a clearer mandate to simplify regulations, lower compliance costs and also build a more enabling ecosystem for startups, MSMEs and entrepreneurs.

 

While urging banks to follow the guidelines of trust, technology and transparency, the FM elaborated that trust is earned through consistent service of ethical conduct and sound governance. “It is very important for the banks to earn and retain trust. Technology should be leveraged not only for efficiency of banks, but also for inclusion and customer empowerment.”

 

Transparency, she said, should ensure that every rupee carries not just an interest to banks, but also intended to align with nation building. “Bank account is not just a passbook, it is a passport to opportunities, enabling access to credit, savings, insurance and dignity,” she said.

 

Praising the City Union Bank on its 120 years for surviving in the British era, early years of independence and not posting a single year of loss, the FM said that the bank had supported growth at grassroots level.