Jaitley urges ADB hub for South Asia in India
No surprises expected on scheduled GST rollout
Indian Finance Minister Arun Jaitley has urged the Asian Development Bank (ADB) to set up a regional hub for South Asia in New Delhi so that the majority of proposals could be processed quickly.
Addressing the ADB board of governors here, Jaitley said there was a need to look at processes and procedures for which more could be done to keep pace with the aspirations of the people.
"For instance, time required to approve a proposal as well as the time lag between approval and disbursement of loans can be further reduced. I am sure you all would agree that speed is what will keep the ADB ahead of others. In this context, I would strongly urge the bank to set up a regional hub in New Delhi for South Asia region so that a majority of the proposals could be processed there speedily," Jaitley said.
The finance minister, who is India's governor on the ADB board, is here to attend the annual meeting of the board of governors on the occasion of its 50th anniversary.
He said such hubs could be established in other regions too. "Many countries in the region have very good systems for social and environmental safeguards with a robust legal and regulatory framework."
For quite some time, he said, India has been requesting the ADB to adopt country systems in this regard and noted that the bank has recently adopted this in the case of Power Grid Corporation of India. "While I wholeheartedly welcome this move, let me stress that we need to adopt country systems quickly rather than being contented with adoption of agency system. This will help reduce delays in the run-up to project approvals to a great extent," he said.
Jaitley said that with the merger of the Asian Development Fund and Ordinary Capital Resources with effect from January 1, 2017, the ADB's envelope of available resources has grown bigger and more resources could be made available for Regional Cooperation and Integration initiative of the bank.
"I am happy to say that as part of RCI initiative, last month, the vision document of South Asia Subregional Economic Cooperation, was launched in New Delhi in the presence of finance ministers of the region," he said.
"I hope the new vision document 'Strategy 2030', which the bank is preparing, would include the measures that I and other esteemed colleagues have suggested during these deliberations."
Referring to the ADB's avowed objective of eliminating poverty from the Asia-Pacific region, the minister said that in addition to sectors like energy, urban development and transportation, there was need to focus more on affordable renewable energy.
"In the area of urban development, especially in the sector of drinking water and sanitation, the major challenges remain in the realm of user charges and financial sustainability of urban bodies."
The bank needs to promote models that will focus on these challenges, he added.
"In almost all the developing member countries, a vast majority of the rural populace depends on agriculture and other allied activities. There is a need for greater focus on climate resilient agriculture, better farm production technologies, improved value chain management and creation of better marketing infrastructure for the farm produce," Jaitley said.
The ADB also needs to focus more on social infrastructure like health and education, he added.
"I am happy to say that, to a large extent, the bank has kept its processes and procedures up to date with the demands of the time," the finance minister noted.
Jaitley is on a three-day official visit to Japan. He will also participate in the spring meeting of the Institute of International Finance.
He will also attend the investors' roundtable session organised by Confederation of Indian Industry and Kotak Bank in Tokyo.
No surprises on GST rollout
Meanwhile, Jaitley ruled out any surprises in the tax rates in the Goods and Services Tax (GST) that is proposed to be rolled out on July 1 and also asserted that there will be no cascading in goods and commodities, which can even see tax rates coming down a little.
"Officers are working on rate fixation. No surprise because we have said that in the first round rather than take anyone by surprise, you take the existing level of taxation and fit them closest to the bracket," he told NDTV.
"My impression is that in goods and commodities, there will be no cascading. So it will come down a little. Service tax will increase a little. That's a balancing act that will have to be done so that the quantum of taxes remains the same."
Jaitley hoped that the GST would roll out as scheduled on July 1. "July looks likely because state after state is approving State GST. By the end of May all state laws approval looks likely."
He said the GST Council would be meeting on May 18-19. "The state laws would have been approved, the constitutional amendment approved and the Rules would have been approved. So, it's not a matter of surprise."
The minister also ruled out the possibility of levying tax on agriculture. "One, it's a state subject and the centre cannot levy such a tax."
"Even as for states are concerned they can see stress in agriculture. This is hardly the time to throw out this idea. Look at the size of land holdings in India. The size of richer farmers would hardly be one per cent."
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