Friday, 28 April 2017

Make in India arms too? Jaitley says new defence manufacturing policy soon

Arun Jaitley, Arun, Jaitley

The government is in ‘advanced stages’ of formulating a new policy to increase domestic defence manufacturing and reduce dependence on the imported high-tech military, Finance and Defence Minister Arun Jaitley said on Friday.

"India is the world's largest arms importer, spending some 1.8 per cent of its GDP on defence. It imports about 70 per cent of defence equipment, a proposition which the government wants to change,” Jaitley said at an event organised by industry body CII.

"We are in the advanced stages of formulating a policy where we can ensure that instead of just being buyers, on the strength of technological and other tie-ups, India also becomes a manufacturing economy," he said.

Jaitley did not give additional details on the proposed policy. "The response that we have from domestic and international industry has been quite encouraging itself," he added.

Additionally, he stated that there would not be any massive surprises in fixing tax rates under the new GST regime and that new rates under the nationwide tax regime, expected to be rolled out from July 1, not be "significantly different" from current levels.

He, however, added that companies should pass on to consumers the benefit of reduction in taxes under GST which will eliminate the current compounding effect of different central and state levies. The GST Council, headed by Jaitley and comprising representatives of all the states, is scheduled to meet in Srinagar on May 18-19 to finalise tax rates on different goods and services after unifying at least 10 indirect taxes into the Goods and Services Tax (GST).

"We are now in final stages of fixing tariffs for different commodities. The formula under which it is being done has also been explained and therefore nobody is going to be taken by surprise, it's not going to be very significantly different," Jaitley said.
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