Monday, January 19, 2015

Modi: Full speed ahead on tax reform

A simpler tax system will be at the heart of a platform of reforms India’s Government will implement over the next 12 months, Prime Minister Narendra Modi has promised.

Addressing last week’s Global Business Summit in New Delhi, Modi said his Ministers were working “at top speed” to ensure international companies wanting to set up business in India had a clearer passage.

“Our complex tax system is crying out for reform…I will push through change at a fast pace,” the Prime Minister said.

“India today is a $2 trillion economy. I look forward to the day when it is $20 trillion economy.”

He said he came to office last May at a time of deep despair with mediocre growth and a record low of public confidence in government.

“We had deviated from the dream of India as a land of opportunity, but now the transition to a new age India has begun,” he said.

Outlining a program which involved reducing the fiscal deficit, damping down inflation, cutting interest rates and the long-stalled introduction of a goods and service tax, Modi said the Government’s overriding objective was to improve the welfare of the people.

A key component of this was agriculture, which was declining even though two thirds of the population still depended on it to make a living in one way or another.

“Our main goal is to raise productivity. This will require using the latest technology, increasing soil fertility, producing more and a greater variety of crops. On the output side the entire value chain will be addressed through better storage, transport and food processing linkages. We will link our farmers to global markets.”

Returning to one of his favourite themes, Modi said the boom in IT would “reform government systems, eliminate waste, increase access to government and empower citizens”.

He looked forward to the day when every village had access to broadband technology “which will transform India in a manner we cannot yet foresee”.

“Today everyone is looking towards Asia for inspiration and growth, and within Asia India is important, not just for its size, but for its democracy, its values, its core philosophy,” he said.

His optimism was echoed at the summit by Nobel Prize-winning economist Paul Krugman who said he definitely saw India as a nation of the future within Asia.

“China has shown the ability to grow faster than most nations, but when it comes to global turbulence India has shown more resilience,” he said.

“China scares me; India, on the other hand, shows great promise.” 


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