Implementation of the goods and service tax (GST) is the most critical reform needed for Indian manufacturing, the World Bank has said weeks after Prime Minister Narendra Modi invited global firms to Make in India to spur manufacturing in the country. According to Denis Medvedev, senior country economist of the World Bank-India, implementing the GST will transform India into a common market, eliminate inefficient tax cascading and go a long way in boosting the manufacturing sector. The transformational impact of reform, particularly if enhanced by a systematic dismantling of inter-state check posts, can dramatically boost competitiveness and help offset both domestic and external risks to the outlook, said Medvedev. The World Bank has pegged Indias economic growth at 5.6% for the current fiscal. According to its estimates, simply halving the delays due to road blocks, tolls and other stoppages could cut freight times by 20-30% and logistics costs by an even higher 30-40%.This alone can go a long way in boosting the competitiveness of Indias key manufacturing sectors by 3 to 4% of net sales, thereby helping India return to a high growth path and enabling large-scale job creation, the World Bank said in its latest India Development Update released on Monday.
Posted on: Wed, 29 Oct 2014 11:19:58 +0000
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