Govt pessimistic about meeting GST deadline  

For the first time, the government seems to be pessimistic about meeting the April 1, 2010 deadline for implementation of Goods and Services Tax (GST) as it is not sure the empowered group of state finance ministers will be able to resolve all the outstanding issues by then.

Speaking at a seminar on Friday, finance minister Pranab Mukherjee said though state FMs were meeting in the Capital on the issue and the government was doing its best to bring all parties to a consensus, there were still "some legislative measures, including the constitutional amendment".

"I am trying to stick to the time schedule, but I will not be surprised if there is slippage of a few months," Mukherjee said. The FM said the empowered committee of state FMs was meeting in Delhi. "It means that we are seriously trying for convergence of views, I am going to have meeting on 10th of next month with them," he added.

Mukherjee did not commit on a date when the government planned to exit from fiscal stimulus. He said this could only be possible after reviewing economic growth in the second and third quarters of this financial year.

He said he would also share his perception on exit strategy at the forthcoming G20 FMs' meeting in Scotland, starting from November 6. He said instead of blanket exit strategy for all nations, each country should devise their own plans depending on their economic situation.

"Instead of having any blanket exit strategy all over the world, let the states make an assessment in the context of the situation prevailing at that point of time and take appropriate decision," he added.

Mukherjee said the exit from fiscal stimulus was a sign of recovery and to achieve high growth rate of 9%, reforms, including labour and financial sectors, were key. "We don't have the required majority in the two Houses of Parliament to clear the bills... a broad political consensus is needed for that," Mukherjee added.

Prime Minister Manmohan Singh separately told the gathering that his government would push forward reforms "in the areas of labour, insurance and the financial sector".

On the issue of bringing back black money stashed in Swiss accounts by rich Indians, the FM said the two governments had advanced talks on revising the Double Taxation Avoidance Agreement (DTAA) and negotiations had been advanced by a month to November 10-11.

Regarding the amount of unaccounted money lying in Swiss banks, the FM said the government had made only one estimate, way back in 1985. No fresh estimates have been made, the FM said, adding the government was serious about amending tax treaties.

Source : Times of India, India, dated 31/10/2009