GST, currency change to be 'game changers' for Indian economy: Arun Jaitley

Bhubaneshwar: Finance Minister Arun Jaitley on Thursday said that goods and services tax (GST) and demonetisation will be 'game changers' for Indian economy.

Rejecting fears about demonetisation, Jaitley said "I do believe that both (GST and demonetisation) will be game changers. This is because GST will ensure higher taxation as far as the Centre is concerned and also higher taxation for states. It is an efficient system. It blocks leakages. It will certainly help the consuming states like Odisha.”

Jaitley was speaking at the "Make in Odisha" conclave here.

On the hue and cry over the demonetisation exercise, he said: "As far as currency changes are concerned, once the demonetisation process is completed and the economy gets back to full stream, the size of the GDP will significantly expand, tax base will expand."

He added, "More money will come to the banks which will be used fruitfully for the betterment of the economy."

the finance minister said that though the initiatives by the central government might appear challenging, its long-term impact will be beneficial for the economy.

The informal economy will take the shape of a formal one and the state would get more revenue since there would be no leakage, the minister pointed out referring to the impact of GST.

"This will boost trade and commerce which in turn will help people at large," he said.

He spoke of states like Odisha that are in line for better infrastructure, health and education through much higher allocations, adding that the chief minister's initiative to transform the state as a manufacturing hub could be better realised through the reforms of the central government.

The Centre will fully support the state in its 'Make In Odisha' campaign, Jaitley promised.

While lauding Odisha's growth rate, which remained about 9 per cent, Jaitley said: "The state has both challenges and assets. While poverty and huge tribal population are a challenge for the state, Odisha is rich in mineral resources, besides a long coastline."

He, however, noted the state government has been able to reduce poverty to a large extent.

"The growth rate of Odisha in recent years has significantly improved. The poverty level has also come down. And one of the great challenges is its growth rate must continue to expand," Jaitley added.

"As far as percentage of manufacturing as part of the GDP is concerned, in Odisha, it is higher."

Jaitley also drew attention to the combination of manufacturing and stress on agriculture that could pay dividends. He unveiled Odisha government's master plan on port-based manufacturing hub.