World Bank’s Report on Global Economic Prospects, published in June 2016, projected that India’s growth will be 7.6 per cent in 2016-17 and will improve to 7.7 per cent in 2017-18. The International Monetary Fund (IMF), in its World Economic Outlook (WEO), published in July 2016, has projected that India will grow by 7.4 per cent in 2016-17, which would be one of the highest growth among the major world economies. India’s growth is projected by the IMF to improve gradually in the coming years.

The IMF has indicated that India’s growth will continue to be driven by private consumption, which has benefited from lower energy prices and higher real incomes. The Global Economic Prospects of the World Bank also indicated that economic activity in India has remained robust, supported mainly by domestic demand. The World Bank has also observed that an accommodative monetary stance, public investments in infrastructure, and progress on structural reforms, including new bankruptcy laws, should support a pickup in private investment.

There is a broad consensus that the Goods and Services Tax is a major reform initiative that will subsume several indirect taxes eliminating their cascading impact, help widen the tax base, integrate the goods and services market and thereby yield higher growth. Hence, the passing of the Goods and Services Tax Bill will pave the way for an improvement in the overall economic outcome.

The Government of India has taken various initiatives to boost the growth of the economy which, inter alia, include; fillip to manufacturing and infrastructure through fiscal incentives and concrete measures for transport, power, and other urban and rural infrastructure; substantive reforms and liberalization of foreign direct investment in major sectors; measures to debottleneck the supply of key raw materials; Skill India and Digital India initiatives; “Make in India” initiative along with the attendant facilitatory measures for a more conducive environment for investment; the new insolvency and bankruptcy related legislation; Start-up India Initiative to boost entrepreneurship and creation of jobs; “Stand Up India Scheme” to promote entrepreneurship among SC/ST and women entrepreneurs; boost to agricultural sector with focus on micro irrigation, watershed development, soil conservation and credit; and, various measures to improve clarity and transparency in economic policy-making. Undertaking measures to stabilize and promote economic growth on a continued basis is high on the agenda of the Government. Its focus on growth-promoting economic reforms and the commitment to improve the ease of doing business and investment is likely to combat the adverse spillovers from global slowdown.

This information was given by Minister of State for Finance Shri. Arjun Ram Meghwal today in reply to a Lok Sabha question.

Goods and Services Tax to subsume indirect levies and integrate markets, supporting broader tax base and investment climate. Passage and implementation of Goods and Services Tax is presented as a central reform to subsume indirect levies, remove cascading taxation, widen the tax base and integrate goods and services markets to support medium term growth; complementary measures include liberalisation of foreign direct investment, new insolvency and bankruptcy legislation, fiscal incentives for infrastructure and manufacturing, and programmes to promote entrepreneurship, digitalisation and improved policy transparency to strengthen private investment and the ease of doing business.