The World Bank suggested on Friday that introduction of Goods and Services Tax (GST), simplification of regulatory and taxation mechanisms, more effective use of subsidies and broadening the tax base can help boost India's economic growth.
The World Bank also cautioned that a weak monsoon and a spike in oil prices due to the Iraq crisis could hit growth, which was projected at 5.5 per cent for the 2014-15 fiscal.
" India needs to focus on a unique opportunity- it has a new government with a strong mandate that wants growth. It needs to double growth and also improve the impact of growth on poverty.
Growth has to be inclusive to be sustainable," said Onno Ruhl, World Bank's country director for India.
Rolling out GST could bring about a " transformative change" while improved regulatory mechanisms, including a simplified taxation regime, would drive investment and boost the business environment, Ruhl further said. Subsidies would have to be used more effectively and in the energy sector, the distribution companies would have to be managed in a more businesslike manner, Ruhl said at a function to release the World Bank's report on Global Economic Prospects, 2014.
Reforms like simplifying the tax structure and broadening the tax base would also create space for pro- poor expenditure and higher growth in the years ahead, Ruhl added. The report, released globally earlier, scaled down India's economic growth projection for this fiscal to 5.5 per cent from 5.7 per cent estimated in April.
Courtesy: Mail Today
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