GST, infrastructure vital for India’s growth: ADB chief

Asian Develpment Bank president Takehiko Nakao today made a pitch for the early rollout of the Goods and Services Tax (GST), saying it will integrate India as "truly one single economy" and help attract more foreign investments.

Lauding the Budget 2016-17 proposals on the farm sector, he also stressed the need for more reforms and pushing infrastructure development.

The ADB chief, in an interview with PTI, further said that growth in India will continue to exceed 7 per cent in the coming years while other global and Asian economies will undergo some kind of adjustment.

"We are now expecting that economy will continue to exceed 7 per cent in fiscal year 2016-17 and 2017-18 and we are now looking at the number again. The global economy and the Asian economy as a whole are in some form of adjustment," he said.

Commending various reform measures taken by the government, Nakao said the pending issue of GST can be done, and it will boost growth.

"For India to grow faster, FDI (foreign direct investment) is important ... for that purpose, the Indian economy should be integrated as truly one single economy and .... rationalisation of tax, the GST, as the government is seeking, is a very important reform. I hope it can be successful," he said.

Finance minister Arun Jaitley on Sunday expressed the hope that the landmark Constitution Amendment Bill for implementing GST as well as the bankruptcy and insolvency bill will be passed in the second half of the Budget Session beginning 20 April.

The government has taken many measures including increasing investment in infrastructure and raising the ceiling for foreign direct investment as well as making efforts to improve the ease of doing business, he said.

Besides, he added that "the Budget proposal includes more investment in irrigation, agriculture sector. The identification number Bill is already passed and of course the Land Acquisition Law and also GST are waiting to get through Parliament."

When asked what more reforms the government should pursue, he said, "One of the important agendas for India is to push infrastructure investment. They need to invest more in infrastructure. We are talking a lot about PPP (public-private partnership) but also it is important that government itself invest more and also they must invest more in the health, education zones."

Land acquisition is another area which requires reform, he said, adding that state governments can frame their own land acquisitions laws.

"Government needs to have more tax revenue-to-GDP ratio to do all these things. Tax to GDP ratio including state taxes can be larger. Of course, it's a difficult issue but I think government can play better role in those areas of infrastructure investment," he said.