Dr Krishnamurthy Subramanian, Chief Economic Advisor, Ministry of Finance noted that unlike a typical crisis, the COVID crisis is caused by underheating rather than overheating of economy, as there is a negative demand shock. This has, however, led to current account surplus of US$ 19.8 billion this year, he added. He was speaking at the CII National MNC Conference 2020 on a virtual platform.
Macroeconomic configuration is being undertaken for formalization of the economy through stress on employment-intensive sectors for growth and resilience. Political will for reform has led to reforms in agriculture, labour, GST and the Production Led Incentive scheme (PLI). Encouraging the formalisation of traditionally informal primary and secondary sector is key to avoid jobless growth, he asserted. Labour law reform has been able to condense 41 sections to just 4, making compliance easier. He also asserted that “Atma- nirbhar Bharat,” which translates to ‘self-reliance’, should not be conflated with ‘self-sufficiency’. The former is built on capabilities which are built through competition, he concluded.
Shri Vivek Johri, Member - GST, IT, Tax Policy, Central Board of Indirect Taxes and Customs, Ministry of Finance, noted in his address that reform goes much beyond Ease of Doing Business. There has been a feedback loop created on how to make reforms an ongoing exercise, and an institutional mechanism to support the same. There has been a crowdsourcing of ideas for Budget 2021 for overhaul of the customs law and an emphasis on the use of technology to make customs faceless, paperless, and contactless, he said. A phased manufacturing programme to reduce tariff on import of inputs has also been initiated. He noted that the heavy compliance burden that industry has highlighted has been addressed through a new scheme which is to be launched called the Quarterly Return Monthly Payment scheme and filing of GSTR 1 will now trigger self-population of GSTR 2 and 3.
Giving the industry perspective, Mr Kamal Bali, President and Managing Director, Volvo Group noted that from the perspective of an MNC, there are five issues he identified. The change to customs procedures on input imports from FTA partners is causing greater delays. Fast-tracking bilateral APAs is also important. The conflict between transfer pricing and customs, Dispute resolution on tax litigation and other GST reforms were the final issues. He acknowledged that a lot has been done on the latter.
Mr Sudhir Kapadia, Partner & National Tax Leader, EY India, noted that enabling judicial capacity at lower courts would be key.
Mr Soumitra Bhattacharya, Chairman, CII National Committee on MNCs, and MD & CEO Bosch India initiated the launch of the EY – CII report on FDI in India. He noted that MNCs must de-risk and diversify supply chains using the plus one strategy.
23 November 2020
New Delhi