Finance Minister Arun Jaitley said Centre is on course to implement GST by July 1.
India continues to be the fastest growing major economy in the world and its growth will accelerate further due to factors like implementation of Goods and Services Tax, Finance Minister Arun Jaitley said. The minister also said the scrapping of old Rs 500 and Rs 1,000 notes will increase tax compliance and reduce threat of counterfeit currency.
"India continues to be the fastest growing major economy in the world… The currency reform initiative will move the Indian economy to a less cash trajectory, increase tax compliance and reduce the threats from counterfeit currency which acts as a source of terror funding," Mr Jaitley said.
He was speaking at the International Monetary and Financial Committee (IMFC) meeting in Washington yesterday. The minister said growth is expected to gain strength in the coming years due to externalities derived from deep structural reforms implemented by the government and robust aggregate demand.
Talking about the new indirect tax regime, Mr Jaitley said the government is "fully on course to implement the Goods and Services Tax (GST)" by July 1.
"The GST will deliver significant externalities by way of improved taxation efficiency and ease of doing business and will convert India into one common market," Mr Jaitley said.
As per provisional estimates, real GDP grew by 7.9 per cent in 2015-16 compared with 7.2 per cent in 2014-15. The second advance estimate for GDP growth for 2016-17 is placed at 7.1 per cent.
The delivery of AADHAR-based Direct Benefit Transfers (DBT) has succeeded in plugging unwarranted leakages, resulting in substantial savings to the government, he said.
For the current financial year, the Union Budget 2017-18 has significantly increased resource allocation for infrastructure as well as rural, agricultural and allied sectors, Mr Jaitley said, adding that the allocation for the rural employment guarantee scheme has also been increased substantially.
"The government would continue to increase fiscal resilience through greater focus on the quality of expenditure and higher tax realisations including those that would accrue from large cash deposits made in banks due to demonetisation," he added.
According to the minister, the wide-ranging liberalisation of the FDI policy in recent years is expected to provide major impetus to employment and job creation.
Most of the sectors, except a small negative list, are now under the automatic approval route, he said.
"India is now the most open economy in the world for FDI," Mr Jaitley said.
Net FDI inflows during April-December 2016-17 increased to $31.18 billion from $27.22 billion during the same period in the previous year. The increasing strength of economic fundamentals have made India the most sought after destination for investments, he said.
The Indian government in November last year scrapped Rs 500 and Rs 1000 notes to curb blackmoney and terror funding as well as to promote digital transactions.