The goods and services tax (GST) will be implemented on schedule from April 1, 2010, even though some states are reluctant to accept the new tax regime, said finance minister Pranab Mukherjee at a post-budget interaction with the industry organised by CII, Ficci and Assocham.

“I understand that all the states are not ready to accept this new indirect tax regime and there will be some political hurdles in the implementation process. Despite this, the goods and services tax will be rolled out across the country by the first of next financial year,” Mukherjee said. The minister further cited the case of value-added tax (VAT) wherein all the states were not part of the launch, having joined in gradually. VAT was introduced in the country from April 1, 2005, but took a couple of years more to be fully accepted by states.

Defending the absence of a blueprint for divestment of public sector undertakings in the Budget, Mukherjee said that the Budget is not an appropriate document to discuss the divestment process. “Divestment is a continuous process and will be done in consultation with the players concerned. The government, however, will retain at least 51 per cent equity in enterprises,” he said.

According to some government officials, divestment will not be done through a strategic sale route. The government is likely to start divesting stake first in the listed companies through sale of equity ranging between 10 and 26 per cent, and later, it might look at listing profit making entities.

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