Visakhapatnam
Vice-President M Venkaiah Naidu said on Saturday that demonetisation and Goods and Services Tax (GST) have led to improvement in India’s fiscal prudence and expanded the formal economy and the tax base.

“The economy is now back on track and is on course to achieve higher growth in the coming years,” he said after inaugurating the three-day CII Partnership Summit at the port city of Visakhapatnam, aimed at attracting investments into the state.

Pointing out how demonetisation drive had brought the money, hitherto lying idle, into the banking system and resulted in bringing down the interest rates, Naidu said: “Any tough reform will face teething problems in the initial stages and the same was the case with both demonetisation and GST. However, the long-term advantages will definitely outweigh the short-term hiccups, which caused a bit of economic slowdown. That period is over now and the economy is on the track to achieve a higher growth”.

Quoting a report from Dominic Barton, a global managing partner of McKinsey, he said that India was poised to become a $10 trillion economy by 2030, which is four times bigger than its current size.

“To achieve this, we have to adopt several unorthodox measures. For instance, with around 120 million people set to join the Indian workforce, skilling them in a short span of time is essential,” Naidu said.

Outlining the major reforms initiated by the government in the last few years, he said that harmonisation of indirect taxes through GST, easing the regulatory environment, facilitating foreign direct investment across all sectors, massive recapitalisation of the public sector banks at Rs 2.11 lakh crore to improve credit growth and investment and the implementation of Insolvency and Bankruptcy Code had given a major push to the economy.

“The tax base has expanded, bringing over 8.27 crore people into the tax net, and the tax system is being corrected so that there is no scope for evasion,” the Vice-President said.
India has now emerged as a bright spot in the global economy and investors from around the world were coming here because of a host of advantages the country offers, he said.

The FDI inflows had increased steadily from $45 billion in 2014-15 to touch $60 billion in 2016-17 while exports had been recovering steadily over the last several months and grew at over 12 per cent in the first three quarters of 2017-18, he pointed out.

India has become the third largest start up eco-system in the world. Quoting a recent NASSCOM report, Naidu said that about 1,000 start-ups were added in 2017, taking their number to nearly 5,200. “A major chunk of these start-ups are from Tier-II and Tier-III cities,” he said.

This is the third investors’ meet being organised by the AP government here after the state’s bifurcation. Over 2,500 delegates from 60 countries and trade ministers from 14 countries were participating in the Summit, Chief Minister N Chandrababu Naidu said.

“With 59 per cent conversion rate at Partnership Summits, AP ranks highest in the country in terms of grounding the projects,” he said.
“Our goal is to become number one state in the country by 2029 in terms of per capita income and growth. As of now, ours is the only state in the country which has clocked double digit growth consistently for the last three years,” the Chief Minister said.
As many as nine plenary sessions and eight sectoral sessions would provide platform for the policy makers, industry leaders, thought leaders and academicians to interact during the event. The Union Commerce and Industry Minister Suresh Prabhu is chairing the summit and guiding the deliberations.
The focus sectors of the summit are Aerospace and defence, agro and food processing, automobile and auto components, electronic and IT, energy, tourism, petroleum and petrochemicals, textiles, renewable energy and medical equipment. Japan and South Korea have been chosen for the country sessions this year.