New Delhi: Armed with the firepower for electoral victories in four states, the BJP government is set to push for significant reforms in the last financial year of its second term at the Centre.
While privatization and asset monetization are among the key priorities to boost revenues to finance welfare schemes in the coming months, four key votes in the GST Council – from UP, Uttarakhand, Manipur and Goa – are to reform five of the indirect tax system. will help. years after its launch. The GST Council, headed by the Union Finance Minister, has representation from all the states and legislatures along with two union territories, Delhi and Puducherry.
With compensation to meet losses during the first five years ending in June, states have little choice but to raise rates and do away with exemptions for certain goods and services, issues that a group of ministers will discuss. being discussed by Which will give its report soon. As part of the formula, the government had assured a 14% increase in revenue, and assured states to compensate through cess on several products to make up for any shortfalls.
“The government is now in a better position politically to expedite some pending reforms. This is the opportune time to pursue domestic reforms when external risks are rampant,” said NR Bhanumurthy, Vice Chancellor, Dr BR Ambedkar School of Economics University.
Resource mobilization is important in the coming months as both central excise duty and VAT will come down during the current financial year. In addition, the Ukraine crisis has driven up commodity prices, necessitating government intervention for edible oil, petrol and diesel. The rising inflationary pressures will require the government to formulate policies to address the challenges posed by the rise in global crude oil prices.
Experts say that with the results in their favour, the BJP government at the Center will take some tough decisions ahead of the next election cycle for states like Gujarat.
“The results of state elections can provide a pivot for policy continuity and policy stability, an important harbinger of future growth prospects. Coupled with this, it looks like the current geopolitical conflict may finally see light at the end of the tunnel with positive signs of thaws. This has already pushed down oil prices and Indian financial markets, with both equities and forex making a comeback with enthusiasm. Soumya Kanti Ghosh, group chief economic advisor at State Bank of India, said it is now important to take policy steps to further accelerate growth prospects.
Decisions such as bank privatization, which required legislative amendments, as well as stalling the sale of one of the general insurance companies because the government does not want to see the government raise issues that are not appropriate for many state-run companies. Huh. The Center may also get an opportunity to revise interest rates on small savings schemes, which have been left unchanged for seven consecutive quarters due to the slowdown triggered by the Covid-19 pandemic and the need to pacify investors in poll-bound states.

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