Finance Minister Arun Jaitley Friday said that his counterparts in all states favour an early roll-out of the goods and services (GST) bill.Speaking after the pre-budget meeting with the state finance ministers, Jaitley pointed out that they were in favour of an early roll-out of GST.The government plans to roll-out GST by April 1, 2016.Last week the government had tabled the GST Bill in the Lok Sabha. According to the government, it is the single most important tax reform since 1947.For a smooth implementation of the bill Jaitley had earlier told parliament that the central government would clear states' compensation dues of about Rs.34,000 crore ($5.5 billion) over a three-year period.Seen as a key to facilitating industrial growth and improving the business climate in the country, the GST bill needs to be passed by a two-thirds majority in both houses of parliament and by the legislatures of half of the 29 states to become law.
By subsuming most indirect taxes levied by the central and state governments such as excise duty, service tax, VAT and sales tax, GST proposes to facilitate a common market across the country, leading to economies of scale and reducing inflation through an efficient supply chain.On the Friday's meeting Jaitley added that some states also wanted the Fiscal Responsibility and Budget Management Act, 2003 (FRBMA) limit raised so that they can borrow more.FRBMA is an act passed by the parliament to institutionalise financial discipline, reduce fiscal deficit and improve macroeconomic management.