Hyderabad: Industry body Assocham has cautioned the government against resorting to a "knee-jerk" reaction to deal with slippage in GST collections, and said those revenues would pick up once the glitches in the system are addressed.
The Goods and Services Tax (GST) collections slipped for the second straight month to Rs 80,808 crore in November, down from over Rs 83,000 crore in the previous month.
Asscoham president Sandeep Jajodia said there is a need for an increased vigil on the implementation of the GST and related problems.
"No knee-jerk reaction should be resorted to in the wake of fall in tax revenue; after all, the collections should pick up once the glitches are addressed," Jajodia told PTI.
On the last full-fledged budget of the present government to be presented on February 1, he said from India Inc's point of view, the most important 'Must Dos' would include problems of banks in terms of their NPAs which have also become a part of the 'twin balance sheet' issue.
"It is only when banks are able to lend adequately again that the demand generation in the economy would be seen," Jajodia said.
The other priority, he said, should be to take steps which revive the private investment that has been on the back burner for the last few years now.
Besides reducing the cost of finance, the private sector should be actively engaged in sectors like the railways which are dominated by the government, he said.
A lot more needs to be done in terms of infrastructure boost that should translate into opportunities for private sector, Jajodia stressed.
"The rural distress is bound to be a focus area for the government and here again, the private sector should be taken as partners, in areas such as financial inclusion, fertiliser, seeds, farm implements, marketing and processing of agri produce," he added.