Sitharaman Promises Further GST Simplification To Help India Improve Business Ranking
Finance Minister Nirmala Sitharaman on Thursday said efforts will be made to further simplify Goods and Services Tax, and expressed hope that it will help in further improving India's ranking in the World Bank's ease of doing business index.
India has jumped 14 places to rank 63rd out of 190 countries in the World Bank's Doing Business 2020 report on account of significant improvement in resolving insolvency and obtaining construction permits.
The other parameters where the country has done well include trading across borders, registering property, paying taxes, getting electricity connections and starting a business.
However, the improvement in the remaining three parameters -getting credit, protecting minority investors, enforcing contracts - are not impressive.
Sitharaman said that the effort will be now to achieve the target to reaching within top 50 rank.
She added that as there is just one rank improvement in the parameter of starting a business, enough effort will be made to improve on this scale, as it is a "very critical" in a cycle of an industry.
"In GST, it is an ongoing process to understand where the difficulties are.We are also looking at what were the glitches in using online filing of returns. So, GST is an ongoing process in improving. Even now for the next meeting, as and when it happens, we want to make sure that several steps are taken to simplify compliance," she said.
On income tax front, she said: "At this stage, there may not be much to say".
The minister also said from next year two more cities - Kolkata and Bengaluru - will be included in the preparation of the ranking index. Currently, the report covers Delhi and Mumbai.
"Till now two cities in India were covered all these years. For a large country and regional diversity being so distinct, we were impressing upon the World Bank that having just two cities may not be adequately representative. So, from the coming year Kolkata and Bengaluru will be added to the list of cities," she told reporters here.
With this, the World Bank will take views of industry from these two cities while formulating the ranking index.
The minister said that there is a significant jump in the parameter of resolving insolvency, "but that does not make me complacent".
"We have to go within top 50th. So, all efforts from now will be moving in that direction," she said.
She added that on obtaining electricity connection parameter, work has to be done at state level.
"In trading across borders and registering property, improvement can be even much more," the minister said.
Speaking on the parameter of getting credit, Chief Economic Adviser Krishnamurthy Subramanian said the current outreach programme being undertaken by the banks has helped in improving credit access.
"Close to Rs 80,000 crore credit has been given, of which 43 percent is new term loans. One lakh Micro, Small and Medium Enterprises have been sanctioned loans close to Rs 8,500 crore, three lakh loans to agri, which is close to about Rs 4,600 crore," Subramanian said.
India has continuously improved its ranking from 142 in 2014 to 63rd this year - out of 190 countries, which are ranked by the bank's 'Doing Business' 2020 report.