Can’t tax Hawai-Chappal and Mercedes car at same rate: Arun Jaitley

New Delhi, November 30: Finance Minister Arun Jaitley today at the Hindustan Times Leadership Summit said achieving a 10 per cent GDP growth rate is challenging and will depend on how the world is moving.

He added that India has done well by growing at 7-8 per cent during the last three years.

To scale to 10 per cent rate is “very challenging” and it will not depend on domestic factors only but on how the world is moving, he said.

On reforms, he said India has structurally reformed and there is no finishing line in reforms.

Taking on Congress VP Rahul Gandhi, FM Jaitley said that India cannot have single-rate GST as it is impossible to implement a tax system that will have the same rate for a ‘hawai-chappal’ and a Mercedes car. On the lack of creation of jobs he said that informal sector creates the most number of jobs in India and the formal sector can only create up to a certain limit which it is doing.

Speaking on recapitalisation of banks, Jaitley said that it would allow them to increase lending. The banks were inhibited by a low capital adequacy ratio, he added. Once capital is infused, the situation will improve.

He said that one of the biggest challenges that the government inherited was the issue of Non-Performing Assets in banks which had affected the ability of banks to support growth. India’s economic growth rate would have been a notch higher if the banks had the capacity to expand their lending during the slowdown days , Jaitley said.

Finally, on the criticism faced by the government for the 12 per cent taxation on sanitary napkins, Jaitley mentioned that reducing the tax rate will diminish domestic produce and it will make way for Chinese products to flood the Indian market.

 By Navaneeth Chitradurga with Agency inputs