PM Narendra Modi
PM Narendra ModiReuters

Prime Minister Narendra Modi on Tuesday said that his government is hopeful of implementing the key Goods and Services Tax (GST) bill next year.

"We have introduced GST bill in Parliament and hope to roll it out in 2016," Modi said while addressing Indian and German business leaders in Bengaluru.

In the monsoon session of Parliament, the Modi government was forced to delay the landmark GST Bill, after facing strong opposition in the Rajya Sabha, where it does not have a majority.

The bill also needs to be approved by half of the state legislatures after it gets passed by Parliament.

"Key reforms such as the land acquisition bill, flexible labour laws and the goods and services tax (GST) have failed to pass Parliament. And given the political see-saw, these are unlikely to be delivered until later this year or even 2016," Moody's Analytics had said in a report in July.

"Without a majority in the upper house, the ruling Bharatiya Janata Party's power has been nullified and the Opposition has blocked proposed reforms," Moody's had said.

Assembly elections scheduled in states like Bihar, West Bengal and Tamil Nadu in the coming months are crucial for the National Democratic Alliance (NDA) government to increase its numbers in the Rajya Sabha.

Modi said that the government has initiated "decisive steps" to alleviate "long pending concerns of investors".

"We have clearly articulated that we will not resort to retrospective taxation," PTI quoted Modi as saying.

Earlier in May, the government had sent notices to some foreign investors asking them to pay tax on gains made in stock markets during the previous years. The confusion over retrospective tax on overseas investors had led to massive sell-off in stock markets, which got eased only after a clarification by the finance ministry.

"We have also decided to defer the implementation of the general anti avoidance rules (GAAR) for two years," Modi added.

Modi said that the government is expediting regulatory clearances, cutting down the "licensing requirements" in the defence sector and has extended the validity period of industrial licences.

"We have increased the validity period of defence industrial licences up to to 18 years from three years," he said.

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