Government and the main opposition party should get the long-stalled Constitutional Amendment Bill on GST passed in the Rajya Sabha in first few days of the monsoon session of Parliament, industry body Assocham has said.
“At this point, when macroeconomic risks like rebound in inflation and continuing slowdown in industrial growth along with global geo-political headwinds are rising, the passage of the GST Bill can be a strong anti-dote to any such negative news flow,” Assocham quoted Secretary General DS Rawat as saying.
The chamber feels that while implementation of the law is still far away since ratification of at least half of states is required, the main hurdle remains in the Rajya Sabha where the composition of the House remains fractured, making it imperative for a wider political consensus.
“The good part is that the Congress has been showing inclination to come on board. We appeal to the principal Opposition to leave aside its wider political difference with the Government and support the most important tax reform for the country,” the industry lobby said.
It saw sentiment lift from its passage to be phenomenal for global investors in financial markets, potentially leading to FDI inflows with positive implications on parameters like current account stability and currency movement.
READ MORE: GST is ‘Brahmastra’ for country: Assocham
During the meeting that lasted for about 45 minutes, the two sides put forth their views and decided to meet again once the monsoon session starts on July 18.
Further, Assocham said the rhetoric for protectionism is expected to get shriller in the US in the run-up to the election, which would be a negative trend for Indian IT companies, in particular.
“Under these circumstances, India has to look inward for demand generation and GST and other economic reforms are essential for boosting morale,” the chamber noted.
The GST Bill has been hanging fire in the Rajya Sabha for a long time due to stiff opposition from the Congress.
The Goods and Services Tax seeks to bring in a uniform tax structure subsuming a number of levies and the government claims that it will help add one-two per cent to the country’s GDP.
On inflation, Assocham noted that while it is true that kharif harvest would be higher along with better prospects for rabi crops because of an abundant monsoon this year, inflation risks are evident in terms of a range of primary articles and manufactured food products.
Besides, capacity under-utilisation across different industry segments remains high with a negative impact on job creation, it added.