Amid the government's resolve to push GST bill in Parliament this week, NITI Aayog Vice Chairman Arvind Panagariya on Monday said he is hopeful about its passage and India is moving in the right direction on big ticket reforms.
"We are moving in the right direction (on GST). I am optimistic that we shall resolve the whole issue. I am upbeat and optimistic," Panagariya told reporters on the sidelines of a CII conference on MSMEs.
Under this major reform, central and state taxes will get subsumed into GST, which will reduce the multiplicity of taxes, and thus bring down the compliance cost.
With GST, the burden of Central Sales Tax (CST) will also be phased out.
According to Minister of State for Parliamentary Affairs Mukhtar Abbas Naqvi, GST bill and the Real Estate bill have listed for discussion in Rajya Sabha this week. However, the logjam over the GST bill, continues.
The Business Advisory Committee of Rajya Sabha has allotted four hours for the consideration and passage of the GST bill. On meeting the fiscal deficit target in the backdrop of 7th Pay Commission report, Panagariya said: "The government is committed. Pay panel report will not kick in for most of the current (fiscal) year.
"A lot of changes will happen. GST will hopefully come into play. There would be a new budget. Finance Ministry is committed to the fiscal consolidation roadmap. At this point this is the thinking and you expect us to stick to it."
While addressing the CII's Global SME Business Summit 2015, he urged the industry to improve their efficiencies rather than asking for tax reliefs to increase profitability.
He said for achieving transformational economic growth, the industry would have to think big in terms of production, scale and efficacy to capture bigger markets domestically as well as abroad.
"We will not progress into transformational kind of growth... unless we think bigger like China... tweaking (tax regulation) here and there (will not help)... for a transformational kind of change you need very different demands from the industry," he said. Panagariya also stressed on the need for labour reforms as it is a hindrance for firms that are either not very small or very big.
He said a large number of labour laws does not apply to very small firms and compliance is easy for big firms having worker's strength in thousands.
On concerns over more than seven percentage point difference between retail and wholesale inflations, he said, "They are measuring different things."