Renewed reforms thrust seen from Finance Minister

Economic reforms are expected to gather pace once again after Finance Minister Arun Jaitley returns home on Thursday.

Top on the agenda will be an announcement of compliance window to declare overseas unaccounted income, smoothening of taxation disputes, and recapitalisation of public sector banks.

 The legislative reforms for which the government is likely to start consulting opposition parties ahead of the Parliament session from July 21 include a unified Goods and Services Tax (GST) regime, easing of land acquisition, and labour regulations.

 Jaitley, who met a host of investors on his nine-day trip to the US, has said the reforms push would continue with the government taking measures to make India a business-friendly country by removing archaic laws hindering investment.

 The black money compliance window is expected to be finalised soon after the finance minister returns. The window to declare overseas unreported income is expected to be two months long.

The Central Board of Direct Taxes (CBDT) is understood to be in consultation with the Special Investigation Team on who all could avail the compliance window facility. Jaitley has re-assured foreign investors of a fair tax regime and an efficient economy with a reasonable interest rate for investors. He has also promised a permanent consultation mechanism for foreign investors.

Bonanza likely for PSBs

Another big ticket reform to give a kick to the economy is recapitalisation of banks.
The finance minister on his return is expected to announce the amount of additional capital that the government intends to inject into the financially stressed public sector banks (PSBs) this fiscal. Recapitalisation of PSU banks is important for infrastructure reforms to move ahead.

On the legislative side, the government is expecting the GST bill to be passed in the Monsoon session of Parliament. The bill has already been introduced in the Lok Sabha but its fate in the Rajya Sabha hangs in the balance.

The Opposition Congress has been pressing for multiple changes such as retaining the revenue-neutral GST rate at 18 per cent, among others. Reforms on land and labour front are also awaited.

The government has encountered a lot of opposition on the passage of the land bill in the Budget session of Parliament.

Jaitley, however, has said in the US that even without the land bill, purchase of land from farmers at good rates is an option for investors. On labour reforms, the government is treading cautiously and has set up a high-level committee to forge consensus among stakeholders.


CRUNCH TIME

The black money compliance window is expected to be finalised soon
Jaitley will announce the amount of additional capital for PSBs
The government expects passage of the GST bill in the Monsoon session
Reforms on the land and labour front are also awaited with stress on consensus