US envoy backs Indian switch to VAT
West Bengal’s Marxist finance minister Asim Dasgupta has found an unlikely ally in his zeal to implement value-added tax (VAT) across India.
The US Consul General in Kolkata, Henry V Jardine, said India must create a true national market, among other things, if it is to attract the huge investments it requires.
“India’s ability to implement a national VAT and remove fiscal and regulatory barriers to interstate trade will create true national markets of a size and scale necessary for significant business commitments,” Jardine told members of the Indo-American Chamber of Commerce on Wednesday.
Incidentally, the US is one of the few nations in the world that does not have any VAT, and Dr Dasgupta’s opponents had highlighted this fact during the public debate that raged preceding the switchover to VAT.
Dr Dasgupta, an MIT-trained economist, is also the chairman of the empowered committee of state finance ministers on VAT.
Jardine said the biggest challenge for India now is to create the world-class infrastructure that is required for sustained higher growth and rural development.
Apart from a national VAT, the government should also ensure full protection for intellectual property rights, Jardine said.