THE GOLD STANDARD AWARD
FOR POLICY-MAKER OF THE YEAR
The Winner: Arun Jaitley, Finance Minister of India: Navigating India’s new GST tax effectively through the political system.
Arun Jaitley is a former lawyer and an outstanding Cabinet minister, serving currently as Finance Minister, Minister of Corporate Affairs in the Cabinet of India. One of the prominent leaders of Bharatiya Janata Party he is an accomplished political operator and a highly effective policymaker, who in his current role has pushed India’s new GST tax effectively through a potential political mine-field.
He was a lynchpin in assisting Narendra Modi win the assembly election in 2002 and since then has been prominent in Indian’s politics and policy. The importance of driving through the GST cannot be underestimated. For too long India’s tax system has failed business and the Indian people. The implementation of the Goods and Services Tax (GST) will reduce tax evasion and improve ease of doing business by engendering a common market throughout the country.
The issue of a GST has been debated in India since the 2003 the Kelkar Committee, and foundered in 2011. Under Jaitley’s highly effective political stewardship a consensus on the need and scope of the built was engendered and the legislation effectively passed through India’s Upper House unanimously. Jaitley remained convinced that the legislation would check leakages, increase tax base for centre and states, eliminate cascading effect of tax on tax, reduce tax evasion and improve ease of doing business throughout India. But he was acutely aware that such a significant change in policy and approach would require strong support both at the central government level and within individual states.
Through effective state-level consultation and with business and trade groups he effectively removed opposition to the legislation by responding to concerns about loss of income at the state level, ensuring that state treasuries would be wholly compensated for a period of five years – a significanlty larger assurance than given in prior draft of the legislation. The commitment to form a GST Council to establish tax rates, and its composition of a two-third state level representation to one-third central government representation and a mechanism to ensure consensual based decisions, was a highly effective move to win state-level support. By working adeptly to address concerns, and through very effective drafting and redrafting of the legislation, Jaitley has set India on course for one of the largest shifts in the business operating environment. GST will ensure one tax in the entire country. It will result in seamless transfer of goods and services in India. As the minister himself concluded: “This is a major indirect tax reform which will in long run will be in interest of the country.”
The Award was presented by Asia Group Advisors’ Adam Schwarz to Narayan Singh (above left), Head of Chancery, Consulate General of India in Hong Kong
For more visit the Asia Group Advisors website: http://asiagroupadvisors.com