India to grow 8% next fiscal as GST benefits kick in, says Das

The Hindu Business Line By PRESS TRUST OF INDIA MAY 5

YOKOHAMA (JAPAN), MAY 5: The Indian economy will grow 8 per cent next fiscal as the full-year impact of the landmark Goods and Service Tax (GST) will be seen by that time, said Shaktikanta Das, Economic Affairs Secretary.

The current fiscal’s GDP growth is projected at 7.5 per cent.

Speaking to select media on the sidelines of the Asian Development Bank’s 50th annual meeting, Das said while the government continues to step up on reform measures, the demonetisation exercise led to widening of tax base and curbing of the shadow economy.

“In 2017-18, we are expecting a 7.5 per cent growth. The GST will be introduced from July 1. The impact this year will be felt for nine months. By next year, the GST would have stabilised much more. So, a full-year impact of the GST will be seen in 2018-19. It would be reasonable to expect that in 2018-19, India will be close to 8 per cent growth,” he said.

Das said apart from GST the government has taken other reform measures, including procedural reforms and stepping up public investment in infrastructure.

“All these factors put together will sustain the GDP growth,” he said.

Das said the Centre is committed to achieving 3 per cent fiscal deficit target next year.

The FRBM committee has recommended a 3 per cent target in next three years.

“So far as the first three years are concerned, already there is a government commitment spelt out by the Finance Minister in the Budget. Even with the 3.2 per cent (fiscal deficit target) spelt out in Budget of current year and 3 per cent in next two years, it should be possible for the government to achieve a debt to GDP of 60 per cent by 2023,” he said.

On bilateral investment treaties (BIT), he said India is planning to terminate 10-year-old treaties and start fresh negotiations on a new text of such agreements.

“This message was conveyed to several European countries with whom our BIT was coming to a close and we said that let us start the negotiations immediately,” he said.

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