Political uncertainty at the Centre after the 2014 general elections holds out the biggest threat to reforms in India, finance minister P Chidambaram said on Wednesday, at the second leg of his east Asia investment roadshow.
Addressing over 300 FIIs, debt investors and corporates in Singapore, Chidambaram reaffirmed the governments commitment to reforms and confidence about passage of the pension and insurance bills in Parliaments Budget session beginning next month. He also said termed the goods and services tax (GST) regime as a major reform and hoped that the legislation would be approved by Parliament in the winter session in December this year, according to a note by Bank of America Merrill Lynch, who co-hosted an investor conference with DBS.
Acknowledging that the GST Bill was unlikely to be passed by April 2013, Chidambaram hoped to introduce in the monsoon session and get it passed in the winter session of Parliament based on a consensus with states. While efforts were on to widen the tax base, Chidambaram said he expects the government revenues to rise by 20 per cent every year though not by raising rates but by through stable tax regime, non-adversial compliance and fair dispute mechanism.
He is reported to have said that the fiscal target in 2012-13 would be maintained at 5.3 per cent of the GDP, which would be achieved through cost cuts and austerity measures. The FM expected the GDP growth rate to be 5.7 per cent this year and around 6-7 per cent in 2013-14 and 8 per cent in 2014-15.