Finance minister Arun Jaitley sought to soothe the frayed nerves of India Inc, foreign and domestic investors and above all the common man on Friday spelling out a road map for economic recovery- by bringing in civility in tax regime, maintaining low rates, rationalising subsidy system and boosting infrastructure and housing.
During a general debate on the Union Budget in Lok Sabha, Jaitley asserted that a pro- business government is necessary for generating more revenues and increasing spending, which would benefit the poor and marginalised sections of society through social sector programmes.The first stage consideration of the Budget was completed with the approval of the lower House.
Realising very well that he has inherited the economic mess of the previous government, Jaitley trained his guns at the United Progressive Alliance blaming the policy paralysis and retrospective tax amendment for the current woes and promised to take a series of steps besides the Budgetary provisions for sustainable growth amid indications of some recovery.
The minister said that the Budget has tried to substantially resolve the problem of retrospective tax. "We have given cushion that we won't tax people retrospectively creating fresh liabilities." The retro tax had destabilised business, which led to several questions that India did not have a stable tax policy, he added.
"So, the world was not ready to accept that India had a conducive business atmosphere." Attacking the previous government, Jaitley said that the country has witnessed an atmosphere of despair and there were " questions over credibility of our economy". The minister also said that he prefers low taxes to encourage economic activity."If you put higher taxes on products, people will buy products from outside. Lower taxes will increase economic activities." He noted that investors over the last few years had developed doubts over the India story in the backdrop of unpredictable tax regime.
Justifying the provisions in the Budget aimed at attracting private investment, including foreign direct investment, in various sectors like defence and insurance, Jaitley said these are necessary to boost industry and manufacturing within the country, which would create jobs. Jaitley also expressed the hope that interest will soften with moderation in inflation. " Interest rates have gone up because inflation is high. I hope interest rate comes down (with decline in inflation)."
EFFORTS TO GET BLACK CASH INFORMATION
The government is making all efforts to procure the list of illegal bank account holders in Switzerland and collecting evidence in this regard.
Union finance minister Arun Jaitley also said that India is in the process of communication with the Swiss authorities and would sign a pact which was in the best interest of the country within the parameters of Swiss laws. He informed the Lok Sabha that Swiss authorities have raised some legal issues after India has written to it to provide a list of illegal bank account holders . The treaty between India and Switzerland on sharing of information on illegal bank account holders was of future and prospective in nature and that is why the European country was not cooperating on the previous lists of such account holders.