Finance Minister Arun Jaitley has said that the government’s initiatives like ‘Swachh Bharat’, Goods and Services Tax (GST) and demonetisation are having desired impact, the latter two resulting in increasing tax compliance and squeezing quantum of cash in the economy.
In his keynote address via video conference – to the Berkeley India Conference on Sunday, Jaitley said that there is public support to the reforms being undertaken by the governments of the day both at the centre and state levels.
“I do hope that India is able to retain its growth rate once again and live up to the aspirations of its people because we must not forget that we not only have a large population to service, we have a very young population to service,” he said.
Jaitley is scheduled to arrive in the US on Monday on nearly a week-long visit to interact with the US corporate world in New York and Boston and attend the annual meeting of International Monetary Fund and World Bank in Washington DC.
With young population there is not only a perception that they are being ‘under serviced’, but also, they are becoming more and more aspirational, he said.
“Time therefore is running against us,” Jaitley said.
In the next one or two decades, if India has to take a challenge for moving into a higher economic group country, “We have to grow at a much faster pace,” he said.
Responding to a question, he refuted the impression that transformational initiatives like ‘Swachh Bharat’, GST and demonetisation have not resulted in any changes on the ground.
“Would you say there are long term benefits and the country would have to wait for those? Or is there any way to mitigate the problem being faced by the country,” he was asked.
A more serious analysis, he argued, would show that even within matter of months there is a short term positive impact of all these projects.
While demonetisation and GST are having desired impact in terms of tax compliances and squeezing the quantum of cash in the economy, he said that for the first time, ‘Swachh Bharat’ campaign has brought to fore the importance of cleanliness.
Before demonetisation, Indian norm was to live with a high cash economy, not paying taxes — “You buy a property, you transact partly in cash, and in business you maintain two sets of accounts,” he said.
“How can a country, which aims to be the fastest growing major economy in the world, which aspires to grow from a developing to a developed economy, continue with the normal of this type,” he asked.
And therefore, “you need to shake the system” in order to reduce the quantum of cash in India and therefore obviously to make it a more tax complaint society, he observed.