Finance Minister Arun Jaitley on Friday promised a stable taxation policy to revive growth and investment, and announced additional funding for food processing, clean energy and healthcare as the lower house of Parliament approved the Union Budget for 2014-15.
Replying to the debate on the national budget for fiscal 2014-15, the minister said the government is taking required steps to revive growth and restore confidence of investors in the economy by removing the perception of "tax terrorism".
He said the government is committed to providing a stable policy environment to revive investments and industrial growth.
He emphasised that the pro-business policies should not send a signal that the government is anti-poor.
"Pro-poor, pro-business agenda not a contradiction. In face if businesses do not flourish then the government will not have revenue to help the poor."
Jaitley said India will not levy any tax with retrospective effect that creates additional burden and existing anomalies in this regard would be corrected.
"One thing we have made very clear: No retrospective tax creating fresh liabilities will be imposed," he said.
The finance minister blamed the previous United Progressive Alliance (UPA) government of creating such an anomaly and said the National Democratic Alliance (NDA) government under Prime Minister Narendra Modi was trying to rectify it.
"Retrospective tax was created by you. This mess of tax terrorism was yours and we are trying to bring civility back by clearing it," said the finance minister, referring to the capital gains tax of 2012 that was imposed with effect from 2007.
Retrospective taxation has evoked much criticism from domestic and overseas investors, notably Britain-based global telecom major Vodafone. In his budget speech earlier this month, Jaitley had assured that India will not resort to it randomly.
The approval of the budget marks the completion of the first stage of Budget exercise in the Lok Sabha. Now the house will discuss and approve demands for grants and the Finance Bill that relates to taxation proposals.
The budget and the Finance Bill must be passed before the end of this month as the Vote-on-Account taken before the general election is due to expire July 31.
Jaitley announced fresh budgetary support to three sectors-food processing, wind energy and health.
He said Rs 2,000 crore would be credited in the National Bank for Agriculture and Rural Development (NABARD) for the benefit of agro-processing units.
"In order to make affordable credit available to agro-processing units being designated as food parks, I decided to set up a special fund of Rs.2,000 crore in NABARD," he said.
To incentivise the wind energy sector, the minister proposed to restore the accelerated depreciation scheme in the sector.
"In the Budget, we have given incentives for wind energy and other renewable forces of energy. I have received more requests for concessions... I will restore the accelerated depreciation and necessary amendments will be made in the Finance Bill."
The finance minister also referred to the growing problem of drug addiction in the states bordering Pakistan, and announced an initial contribution of Rs.50 crore to set up de-addiction centres, especially in Punjab.
Copyright©2021 Living Media India Limited. For reprint rights: Syndications Today