New Delhi: Early introduction of Goods and Services Tax and Direct Taxes Code will help revive the sagging economic growth which declined to a decade low of 5 per cent last fiscal, newly elected Assocham President Rana Kapoor said.
"GST alone can increase India's GDP by 0.9 per cent to 1.7 per cent in the medium term and between USD 325 billion and USD 637 billion in the long-term. It can significantly boost the country's economy," Kapoor told reporters here.
The implementation of DTC would enhance economic efficiency of the tax system by eliminating distortions and increase tax-GDP ratio, he said.
Kapoor also pitched for enactment of the Companies Bill to improve corporate governance and further strengthen CSR, e-governance and the role of women directors.
Pulled down by poor performance of farm, manufacturing and mining sectors, economic growth slowed to 4.8 per cent in the January-March quarter and fell to a decade's low of 5 per cent for the entire FY 2013.
Referring to concerns faced by the Indian economy, Kapoor said there are risks of a fiscal slippage and cautioned that implementation of the Food Security Bill could push up the fiscal deficit by 0.2 per cent. The other risks include rise in retail inflation, rupee depreciation and widening of current account deficit, he added.
To boost investments in the country, he said Assocham would work with the government to push the PSUs, which are sitting on huge cash piles, to invest their surpluses.
"The government should utilise the cash surplus of PSUs to boost investment. The surplus funds, which can be invested for capex, are estimated at Rs 2.8 lakh crore. Assocham would also work with the government on enhancing investment in urban infrastructure to sustain growth," he said.
On new bank licenses, Kapoor, who is also CEO and MD of Yes Bank, said there is definitely a need for more banking services in the country, either from existing players or from new entrants.
He further said that India Post could become a vibrant bank by using the existing infrastructure of the postal department.
Replying to a question on the forthcoming quarterly monetary policy of the RBI, he said that under current circumstances, the rate cut may not be possible and most probably the status quo would be maintained.
"During the current fiscal, the chamber would focus on states to mobilise growth and investments besides forging partnership with global organisations," Kapoor said.
To boost FDI further, he said there is a need to improve business environment as "India has the potential to attract USD 50-60 billion FDI, annually".
First Published: Friday, July 26, 2013, 17:37