Implementation of GST most required reform to boost manufacturing sector: World Bank

Just few days after Prime Minister Narendra Modi invited global firms to participate into 'Make in India' programme to spur manufacturing in the country, World Bank, in a twice yearly report on the Indian economy and its prospects, described implementation of goods and service tax (GST) as the most critical reform, which would go long way in boosting the manufacturing sector. According to the World Bank, implementation of GST would not only transform India into a common market, but will also eliminate inefficient tax cascading. Further, it emphasized that transformational impact of reform, if enhanced by a systematic dismantling of inter-state check posts, could considerably boost competitiveness and help counterbalance both domestic and external risks to the outlook. Further, World Bank which pegged India’s economic growth rate at 5.6% in 2014-15, followed by further acceleration to 6.4% and 7.0% in the next two financial years respectively, in its report added that merely halving the delays due to road blocks, tolls and other stoppages that would cut freight times by 20-30% and logistics costs by an even higher 30-40%, could strongly boost the competitiveness of India's key manufacturing sectors by 3 to 4% of net sales, thereby helping the country to resume its high growth path and enable large-scale job creation.