- 3 days ago
In an exclusive interview with India Today TV's Managing Editor Marya Shakil, Union Commerce and Industry Minister Piyush Goyal called GST 2.0 the most game-changing and transformational reform the country has seen in several decades.
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00:00Welcome to this special conversation.
00:10The Modi government has ushered in next generation GST reforms.
00:15What will be the impact of these reforms on you and me, the Aam Aadmi, the middle class?
00:21What happens to the MSMEs?
00:24What is the rationale behind it?
00:27What is the calculation?
00:29And will the impact be as the government is hoping it will be?
00:32To answer all these questions, I am being joined by Union Commerce and Industry Minister, Mr.
00:38Piyush Goyal.
00:39Mr. Piyush Goyal, appreciate your time here on India Today.
00:42How do you assess the impact of these reforms on all those that you're hoping it will be
00:50impacting?
00:51And how soon will the effect be seen?
00:53Well, first of all, I'd like to compliment and thank Prime Minister Narendra Modi for
00:59what I believe is the most game-changing and transformational reform we have seen in several
01:06decades.
01:07this is a Diwali gift which he had promised on 15th August and as we all know, he always
01:14delivers on his promises.
01:16on the auspicious occasion of Navaratri on 22nd September, when these taxes become applicable, you will see
01:25every segment of society, our sisters and daughters, the youth of the country, our farmers, every
01:35product that is used by a common man from morning to night, he will feel the impact of lower prices
01:44in his life.
01:45And I think with the simplification of the laws around GST and procedures and processes and
01:51a more rational classification, this is a perfect reform measure which will not only lead to ease
02:01of doing business for the producers and people involved in the market, but will also have a significant
02:08impact for the ease of living, comfort and joy of the common man.
02:17With lower taxes, I think there will be great buoyancy in tax collection and market demand and this
02:25growing market demand will lead to a virtuous cycle of growth.
02:31And I see this as an icing on the cake.
02:35In an economy which is the world's fastest growing economy, 7.8% last quarter, when you
02:40add a big boost to consumer demand, you are actually setting the stage for a long duration
02:48of continuous growth and prosperity for the people.
02:53Six months ago there was income tax cuts for the middle class which was seen as a huge relief
02:59and now this.
03:02What's really the process here?
03:04Six months it has taken for you to arrive here and then there are much more that is in
03:10the pipeline, Mr. Goyal.
03:12So what is the government's thinking?
03:15If you recall, Prime Minister Modi inherited a broken economy in 2014.
03:19We were a fragile five economy, weak fundamentals, low foreign exchange reserves, high inflation,
03:29low growth, banking sector in the shambles.
03:32Our passport had no respect when we went anywhere in the world.
03:38He has very systematically over the last 11 years strengthened the macroeconomic fundamentals,
03:45so that today we have the ability to be able to make such far reaching and transformational
03:51duty cuts in GST and lowering down the income tax to such reasonable levels.
03:59This has happened over a long period of sustained, honest government, decisive government, reform-oriented
04:08thinking and a very sensitive government caring for the last man at the bottom of the pyramid.
04:17After all, when 25 crore Indians come out of poverty in such a short period of time, after
04:23all when 80 crore people continue to get free rations, even though they may not be in dire
04:29poverty today.
04:30But as a support measure, when you have more than 60 crore people getting free health care,
04:36and at the same time you are supporting medical insurance with zero GST on medical insurance
04:42or life insurance today for individuals, when you are supporting the pharma sector with lower
04:48cost of medicines or lower cost of medical devices.
04:52All of these measures coupled with greater disposable income in the hands of the middle class are
04:59really reflecting a strong economy, an economy that has come out of the shadows of the Congress
05:05rule to become a truly world-level economy, will be the third largest in 2027, and fast grow
05:16from a 4 trillion dollar economy to a 30 trillion dollar economy in our Amrit Kal to Viksant Bharat.
05:24And sir, big bank reforms, yes, but your opponents, and I'll quote the former finance minister
05:33here, Mr. P. Jidhamram says that this is coming eight years too late.
05:37Well, I think Mr. P. Jidhamram was such a failed finance minister, which is why he could
05:43not bring in GST reform while he was in government.
05:48He never was willing to give a five-year commitment to compensate states at 14 percent to earn their
05:56trust and implement GST.
05:58In his time, there used to be a plethora of taxes, duties, levies, nearly 34, 35 taxes.
06:05People were fed up with the number of taxes and the cascading effect of multiple taxes.
06:11It is Prime Minister Narendra Modi who even the opposition states trusted and who offered
06:17five years of compensation at a 14 percent growth rate, not a small percentage.
06:23And therefore, we were able to implement GST, when we implemented GST, the cumulative impact
06:29of taxes were less than what they were in the Congress regime.
06:34Over the years, we have been reducing taxes consistently on a plethora of items of the common
06:39man.
06:40I remember way back in 2018 also, Prime Minister Modi had reduced taxes on over a hundred items.
06:47Every GST councillor keeps giving relief.
06:49This work started quite some time back and groups of secretaries, groups of ministers recognising
06:56that now the compensation will no more be required.
06:59The period is over, the COVID stress is also over.
07:05Prime Minister was very keen that we give a fillip to the economy.
07:09We give a massive trust to consumers' benefit.
07:16And the changes that have been done across the board, textiles, furniture, medicines, white
07:23goods like air conditioners, two wheelers, automobiles, I think every section of society stands to
07:32benefit from these changes and it's the right time.
07:38Prime Minister Modi is continuously strengthening the economy and all his steps continue to further
07:44empower the people of India.
07:47Sometimes a step, a misstep taken too early could have caused irreparable damage to the economy.
07:54As someone who engages with industry stakeholders regularly, how do you assess the likely impact
08:01of these reforms on manufacturing, you know, particularly to do with supply chains, especially
08:06the MSMEs?
08:07See, look at how systematically Prime Minister Modi has implemented his programmes.
08:15He brought in the PLI schemes, production-linked incentive schemes.
08:20Almost two lakh crores was given to sectors where we needed to become self-reliant.
08:26Like in the pharma industry, he gave support to the key starting materials and APIs.
08:34He supported speciality steels.
08:36He supported the manufacture of white goods like air conditioners and LED lights.
08:41He supported the manufacturing of renewable energy equipment like solar equipment or equipment
08:48for producing semiconductors in India.
08:53He has very carefully crafted the economy into a direction that we can become stronger and
09:00more resilient in our supply chains.
09:02And now with these GST cuts, a GST massive cut earlier would have helped only the imported
09:08goods.
09:09Now with Indian domestic manufacturing rising, with more and more private sector and public sector
09:15investments supporting Indian manufacturing, Swadeshi manufacturing.
09:21This is the right time to support them with lower taxes.
09:25This will have a huge impact on our supply chains, help us create more resilient supply chains locally.
09:32For example, the tax on trucks has come down from 28% to 18%.
09:39This will give a big boost with lower logistics costs to the movement of goods and have an overarching
09:45impact to strengthen our supply chains as well as reduce the cost of logistics and the cost
09:52of the final product.
09:53Simultaneously, the Jan Vishwas bill has come out, we are continuously decriminalizing laws,
10:01removing obsolete laws, reducing compliance burden, making it simpler to comply with process
10:08and procedure in the government, removing the interference of government and government officials in the
10:15lives of common man and businesses.
10:18This process was started in 2014 and continues to happen and now is getting accelerated so
10:25that ease of doing business leads to ease of living for every citizen of India.
10:31Mr. Goyal, GST council is about center and the states coming together.
10:36That is the construct of this body.
10:40How much of credit would you be sharing with states and particularly the opposition rule states
10:46who are now saying that we have been telling the government to take some steps and they
10:51have gone ahead and done so?
10:52Well, then why are they opposing it after the meeting got over?
10:57I have heard a lot of negative comments by the chief minister and the government of Karnataka.
11:03Why are they doing such double standards?
11:07I think over the years there have been so many occasions when we have tried to reduce taxes,
11:13where opposition rule finance ministers and the GST council have not helped us to create
11:20a consensus.
11:22The opposition speaks with a forked tongue.
11:27I think the opposition has not really behaved responsibly in several meetings of the GST council.
11:37Even in this meeting there was an effort to derail this massive transformational reduction
11:44in taxes until two or three states got isolated and had to join the consensus.
11:52I think Prime Minister Narendra Modi has consistently looked at what is good for the people of India,
12:00what is good for the economy of India, what is good for the growth of India, what is good
12:05for the long-term development of India.
12:08The opposition has benefited significantly from the GST and we are happy.
12:14The states ruled by the opposition should also get higher revenues.
12:18I do hope they will bring in greater transparency and honesty in their working so that the fruits
12:25of growth and buoyancy that lower taxes will bring will also accrue to their states as much
12:32as they are accruing to the country as a whole.
12:35As someone who is helming the trade talks with the United States, how much of these reforms
12:41do you think will help cushion the Indian industry, the country and the Indian economy vis-a-vis
12:48the tariffs which have been imposed?
12:49I think the two are not hyphenated.
12:52The two are separate issues.
12:54We are dealing with trade negotiations on another track but the effort to give a boost to consumer
13:02demand, to give a benefit to the women of the country, to the youth of the country, to
13:06the farmers, to MSMEs.
13:10That effort is getting a big impetus with today's, yesterday's GST reform measures both in terms
13:20of process simplification, rate rationalization and massive reduction in rates in almost items
13:29across the spectrum of daily use of the common man.
13:33Sir, the India-US relationship has been carefully crafted and it's been a relationship of 25 years.
13:42There has been, you know, a measured, cautious, careful response from India every time belligerence
13:48has been displayed by the White House.
13:52Do you see the trade talks moving in the right direction?
13:55Well, I think we've had very good relations for far beyond 25 years.
14:00The US and India have been friends and allies for decades and decades so far.
14:07But it has had its moments.
14:09For example, if you recall when we did the nuclear tests in 1998, the United States had put sanctions
14:15on India.
14:16We were able to weather that storm.
14:18There will be occasions when there may be certain blips in the relationship.
14:25But I think it's a very, very consequential, very strong relationship.
14:30It can weather many storms and will continue to be a very strategic friendship, a very important
14:39relationship.
14:40We'll continue to grow together.
14:42We'll continue to have a lot of business to do together.
14:47As someone who is involved in the trade talks, I'm saying it again because you were responsible
14:51for the trade deal with the United Kingdom, you're hoping with the European Union soon.
14:56Are you looking for fresh markets because of these tensions?
14:59Well, I think every relationship stands on its own legs.
15:04Our relationships with the United States and our discussions with them continue as before.
15:11At the same time, we have already been talking to so many regions across the world.
15:17After all, we finalized free trade agreements with Mauritius, with UAE, with Australia, with
15:25the four-nation EFTA group, Switzerland, Liechtenstein, Norway, and Iceland, with the United Kingdom.
15:32We have almost come to final terms with Oman.
15:35We have finalized the terms of reference with Eurasia.
15:40We have been negotiating with the European Union 27-nation bloc for the last three and
15:46a half years and making rapid progress.
15:49The Commerce Secretary was in Brussels Monday, Tuesday.
15:53Their teams are here next Monday and we have the next round of negotiations.
15:58My counterpart, Trade Commissioner Marosh, is visiting Delhi on 11th and will be here for
16:05three days.
16:06So there's progress on multivarious relationships.
16:10The Singapore Prime Minister is in India today.
16:12The German Foreign Minister, with whom we all had extensive discussions, was here last
16:17two days.
16:18So there's a lot happening across the world.
16:22The UAE Trade Minister was in Mumbai on Friday and Saturday.
16:28So there's so much happening and each relationship has its own strength and stands on its own feet.
16:36Let me wrap up this conversation, Mr. Goyal, with the thought that I have.
16:40What makes these reforms next generation?
16:43Why are you calling these GST reforms as next generation GST reforms?
16:48Because, Maria, we had inherited in 14, as I said, a very, very difficult economic situation.
16:56We were almost written off by the word.
16:58We spent the first 11 years in building up such a strong macro economy, such strong fundamentals
17:06in the Indian economy with a number of reforms that have happened in the last 11 years.
17:12If I were to start listing them out, we would have to continue this interview till tomorrow
17:17morning.
17:18I mean, imagine if Digital India hadn't taken off as early as 10 years ago.
17:24Would we have weathered the COVID storm?
17:27If Maker India was not given a thrust since 2014 itself and launched the Maker India program
17:36launched in 2015, we wouldn't be such a manufacturing superpower today.
17:42If Startup India was not given a leg up nine years ago, we wouldn't have 200,000 startups,
17:48the world's third largest startup ecosystem.
17:52If banking reform hadn't started in 2014, we wouldn't have one of the world's strongest
17:58banking sectors today.
18:00If we had not strengthened our foreign exchange reserves and nearly doubled our exports over
18:05the last 11 years, we wouldn't be sitting on $700 billion, highest foreign exchange reserves
18:12we had seen in so many years, even as a percentage of our GDP.
18:18I think in every respect, Prime Minister Modi has prepared the nation for today.
18:25And this massive GST reduction will give a great fill-up to the Indian economy.
18:31I see in this the start of a virtuous cycle of growth which will take India to newer heights.
18:38By 2027, this transformational initiative will give a big boost to domestic spending and consumer
18:46demand coupled with our spending on infrastructure will make us further grow and continue to be
18:53the world's fastest growing large economy.
18:56And in this Amrit Kall to 2047, this is the start of next generation reforms.
19:03You will continue to hear many more in the weeks and months and years to come as we power away to becoming a developed and prosperous nation.
19:14Viksit Bharat 2047, as the nation, the 140 crore Indians resolve to use Swadeshi goods.
19:23And you can see that sense coming wherever you go.
19:26You can see it in social media.
19:28People of India today want to be Atmanirvan.
19:31They want to give preference to made in India goods.
19:34They recognize that quality goods are now available, made in India by the sweat and toil of our Indian, made in the soil of India.
19:44And that is encouraging Swadeshi.
19:46Mahatma Gandhi's dream of Swadeshi is being fulfilled by Narendra Modi.
19:52All right, Piyush Goyal, really appreciate your time and congratulations to your government for these reforms.
19:57That's all from me.
19:58Thanks so much for watching.
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