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$5 trillion economy: Here’s what govt doing to achieve the goal by 2024

FE Bureau
Finance Minister Niramala Sitharaman, nirmala sitharaman

Decriminalising corporate laws, settling tax disputes and rapid privatisation of state-owned companies are among the measures the government is working on to put the country on the path to a $5-trillion economy, finance minister Niramala Sitharaman said on Sunday. Sitharaman said the government was working to remove criminal provisions, that relate to penalty and jail terms, in the Companies Act. "I have gone through this with a comb. We are working to decriminalise companies and ensure no other Acts, including Income Tax and PMLA, have such provisions," the FM asserted. She added the government does not want a law that treats every business house with suspicion. Sitharaman was speaking at the Palkhivala memorial lecture on 'Road map to $5-trillion economy' in Chennai.

The FM also emphasised the need for quick resolution of pending tax-related disputes so that firms, especially MSMEs, can get a new life in a technology-driven regime without the need for face-to-face interaction with tax administration. She said the dispute resolution scheme launched last year for indirect taxes had been a success and that the ministry would replicate the same for income tax cases.

"Nearly 95% cases are closed. About Rs 35,000 crore has been settled (for cases related to excise and service tax regime). The total value of cases was over Rs 2 lakh crore.

There is another 5% cases which didn't opt for the scheme, and they will be fought in courts," She said. She added that most MSMEs disputes have largely been sorted.

Acknowledging the government had not moved fast on privatisation, Sitharaman noted that despite Cabinet clearances for sales of a list of government-owned companies,progress has been unsatisfactory. "Whether it’s Air India or other companies, the process hasn’t moved at all. Every time it moved forward two steps you had to take a step back," she observed.

Addressing the perception that bank officials are apprehensive of enforcement agencies Sitharaman said the government has made it clear to the banks no genuine commercial decisions would be questioned. However, she added government would not deter from taking action if clear evidence of wrongdoing was found.

The finance minister said the swiftness with which the new government brought clarificatory amendments to Insolvency and Bankruptcy Code (IBC) was an example of facilitation measures the government required to undertake for a $5 trillion economy. Sitharaman brushed aside criticism of demonetisation and said it was a necessary measure to suck the idle money out of the system. "The money was brought into the system and it ensured that the transactions could be registered formally. The collateral benefit was also seen in the rapid adoption of digital mode of transactions," she said. Sitharaman also counted the newly created position of chief of defence staff (CDS) as a measure that would contribute to a $5 trillion economy. This, she said, would bring together cohesion and synergy among the defence force arms and help domestic industry in exporting sophisticated defence equipment and parts.