The impact of demonetisation on the Indian economy is transient and it will attain a growth rate of over 7 per cent in 2017-18, Economic Affairs Secretary Shaktikanta Das said on Saturday.
“The impact of demonetisation on growth would be transient and it would not spill over to the next year which would see a growth of 7 per cent plus and the economy would continue to do well thereafter,” Das said here at the national executive committee meeting of the Federation of Indian Chambers of Commerce and Industry (FICCI).
“In spite of the stronger global headwinds, India remained buoyant,” the Economic Affairs secretary added.
Das said the Budget 2017-18 has a progressive outlook, seen by avoidance of retrospectivity in taxation, targeting of government support through Aadhar, reforms in agriculture, especially the model law on contract framing, proposed amendments to the Airports Authority Act, metro development to harness private investment and skills and integration of spot and derivative markets to provide remunerative prices to farmers.
Finance Secretary Ashok Lavasa said that the Budget charts a story that is consistent with the policies of government, is predictable in approach and shorn of unnecessary surprises for the industry.
Lavasa said that governance was being made more transparent and efficient through measures such as government procurement through the e-marketplace and rationalisation of central sector schemes.
Technology was being increasingly employed to impart efficiency in expending fund, he said.
Once, every two years of the duration of a government scheme, an evaluation would be done on the way funds were being spent, he added.
Revenue Secretary Hasmukh Adhia said the most challenging task for the government is to increase the share of personal income tax in GDP, which at present is abysmally low.
He said personal income tax has a share of a mere two per cent, which needs to be raised substantially. Also, the profile of personal income tax does not match with the consumption profile of the country, which needs to be looked at.
Speaking on the issue of India’s corporate income tax not being globally competitive, Adhia said: “The government had limited resources and therefore moderation in corporate income tax rate has to be seen in the context of a concomitant expansion of the tax net.”
On Goods and Services Tax (GST), he said that it was well on track with the Centre and state governments on board and it is hoped that on July 1, the new indirect tax regime will become a reality.