Jaitley for subsidy rationalisation, against high taxation

Written by Press Trust of India | Mumbai | Updated: Aug 17 2014, 08:12am hrs
Finance minister Arun Jaitley on Saturday said the ballooning subsidy bill needs to be lowered by rationalising the dole-outs.

Stating the government should not be doling out pre-poll populist measures that increases the subsidy bill, Jaitley said, If we waive off loans, empty the government treasury, and destroy economic discipline, then I feel this would not help the economy or the country. Admitting he too gets subsidies, Jaitley said, But I firmly believe I have no right to avail of those subsidies.

However, the minister, who was speaking at a BJP-organised function in the city, did not elaborate on the issue. It can be noted that after touching a low of under 2.5% of GDP in FY07, the government borrowings have been on a continuous upward spiral. This pushed up the subsidy bill to over 2% of the GDP as of FY14. The subsidy bill, which began when the economy was clipping past 9%, did not show a decline during the slowdown period.

Jaitley also said the current situation of high inflation and low growth has to be reversed to achieve sustainable GDP expansion along with improvement in price situation. If inflation is high then you begin at a point where growth is low. We need to change this situation. And, I believe that unless we find out the reasons which have led us to such a situation, it is difficult to solve it, he said.

Jaitley further said the Modi government does not believe in a high taxation regime but is being pro-business and pro-poor at the same time.

Jaitley said there is nothing wrong in being pro-business as India wants investments for better economic growth which in turn will lead to job creation and higher revenue for the government. Unless the government gets revenue, it cannot build infrastructure and service the welfare schemes for the poor. By being pro-business and pro-poor, I am not contradicting but both have to exist at the same time, Jaitley said.

On retrospective taxation which the last government had brought in thus spooking investors, Jaitley said the imposition of the tax created a negative sentiment about India. If your taxation policy is so fragile then there is no authenticity to your economic and tax policies. The UPA government had pushed the country to this situation, he said, adding the present dispensation is not a high taxation government.

Govt aiming at 24x7 power supply: Modi

PM Narendra Modi on Saturday said his government was aiming at providing 24-hour power supply as he outlined his vision for infrastructure development with a nationwide network of roads, power transmission lines and water grids. He also equated saving of electricity with service to the nation. The dream of my government is to provide electricity all seven days a week, 365 days a year, 24 hours a day to every village, Modi told a gathering after dedicating to the nation 765 KV Solapur-Raichur transmission lines and four laning of Pune-Solapur section of NH-9.

Cargo ports coming up at 3 places

To reduce dependence on roads for cargo movement and to reduce the costs, Jawaharlal Nehru Port Trust (JNPT), Indias largest container port, will set up satellite ports at Wardha, Aurangabad and Surat, shipping minister Nitin Gadkari said on Saturday. Wardha and Aurangabad (in Maharashtra) will have dry ports from where the cargo will be moved by railway, while at Surat there will be a water port, Gadkari said. He was speaking at a function at JNPT in the presence of PM Narendra Modi who laid the foundation stone for an SEZ. Cargo worth R16,000 crore from or to the Marathw-ada region of Maharashtra passes through JNPT, while over R8,500 crore worth of goods come through Nagpur annually, he said, adding that Surat also contributes to the cargo passing through JNPT.