Can’t Let Industry be a Victim of Dumping

Nirmala Sitharaman, Finance Minister, has expressed her views on the burning issue of imports and rationalization of GST rate

Excerpts:

• Challenges in export

We still need to do a lot more to strengthen our exports. I see an opportunity in each of the challenges that exist – be it the geo-economic fragmentation or tariff war or some economies reaching a deflationary level or the lack of demand overseas. As our Prime Minister says, “Where there is a challenges, there could be an opportunity”.

It is for us to move very smartly to make sure that this is the opportunity that India was waiting for. After all, it is another 22 years before we should reach the goal of a Viksit Bharat.

• Challenges of cheaper imports

You are already seeing signs of that dumping of excess inventory, and you largely know which country we are talking about. When such a chance exits, we will have to guard ourselves against it. We need to be smart about these sorts of things – about how carefully we can find a way to avoid it.

There are small and medium India manufacturers who prefer cheaper inputs. But even then, the larger consideration should be to allow them the access to cheaper inputs without letting them become a victim of dumping.

And among the stakeholders, there are sections which prefer complete stoppage of dumped goods and some others prefer a calibrated approach to it.

The government’s task is to make sure that we plan for it and balance everybody’s interests.

• Rationalisation of GST

It was late 2022 when we started this exercise of rationalising the Goods and Services Tax (GST) – both rationalisation of the rates as well as the number of slabs, and review of compliances and the process itself.

In early 2023, some people were saying “You are not even allowing the GST to settle; after all, it was launched in 2017 and you’re already starting to revamp it.” So, there was an element of discouragement. But we didn’t stop it.

Different groups of ministers were looking at it. And every time there is a change of ministers, we revamped the committees. But that work has almost reached a finale. The groups have done excellent work, but I still have taken it upon myself to, once more, completely review each of the group’s works, and then take it to GST Council to see if we can come to a final agreement on these.

So, we are very close to coming to a final call on some of the very critical issues – reduction and rationalisation of rates, looking at the number of slabs, and so on.

Is there any possibility you can give us a glimpse into what is in store any more than what you have said?

• Rethinking on GST Slabs

I think I was very clear about the reduction in rates. And that is not as though we are now exploitatively high in rates now.

At the time when the GST was launched (in July 2017), revenue neutral rate was somewhere around 15.8% and by 2023, we had already brought that to 11.4%. And when it was launched the average tax was itself lower than what existed before the GST rollout.

So, let me dispel any (notion) here that the GST has made life costlier. Item by item, I would challenges anyone to tell me if there is any one item for which the tax has gone up after the GST introduction. I hope further that, it will come down eventually.

• Private investment is somewhat narrowly focused on a few sectors.

If industry is investing only in some sectors and not in others – these are commercial decisions. I am not asking them to say why they are or why they are not (investing), but I would like them to talk. If they don’t speak out, how will the government have any clue on how things are moving?

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