BENGALURU: Revenue minister RV Deshpande on Sunday urged Prime Minister Narendra Modi to respond to the slowing economy by slashing goods and services tax (GST) rates, which he said, will give a leg-up to the manufacturing sector in these times of serious crisis.
The PM’s steps on the GST front will have a positive effect on employment as youths are getting desperate with the economy adding no new jobs.
The minister, who has written a letter to the Prime Minister congratulating him on the NDA’s win, told ET that the GST slabs are just one or two in many parts of the developed world. Minimum number of slabs will help tax administration and compliance, he said. India currently has four slabs of 5%, 12%, 18%, and 28%.
“We have the peak rate of 28% which I think is very high. The economy is in a bad shape today and the manufacturing sector is in deep pain. And high GST rate is hurting the industry,” he said. The Prime Minister, he added, has implemented GST which was conceived during the UPA regime, and now he must carry forward bold reforms on the GST front. “I hope the PM will recognise slowing down economy and liquidity issues the industry is facing,” he said.
Deshpande urged the PM to encourage establishing of industries like textiles, toys and those in the services sector that are labour-intensive. The Centre, he said, could link incentives and concessions for these sectors to their employment generation capacity.
The minister also urged the PM to pay urgent attention to handling natural calamities and devise lasting solutions by moving away from temporary measures, as a response each year. He gave the example of Karnataka, which in the last 18 years had sufficient rainfall only for four years, but severe drought for 14 years.
Normally, states are relying on temporary measures to mitigate disastrous situations such as drought and floods. But no state has given the priority to find permanent remedy such as diversion of river, rejuvenation, preservation and inter-linking of water bodies, forest conservation, etc, Deshpande said.
Published On : 27-05-2019
Source : The Economic Times
