1. Subsidies meant for needy, not wealthy: Finance Minister Arun Jaitley

Subsidies meant for needy, not wealthy: Finance Minister Arun Jaitley

‘Budget will not resort to sheer populism, but focus on structural reforms’

By: | New Delhi | Updated: January 31, 2016 12:28 AM
Arun Jaitley said the Prime Minister had yesterday stated that subsidies are being rationalised and not abolished. (PTI)

Arun Jaitley said the Prime Minister had yesterday stated that subsidies are being rationalised and not abolished. (PTI)

Finance Minister Arun Jaitley on Saturday said the government per se is not against subsidies, but maintained that these are meant for the needy and not the wealthy, remarks that come a day after Prime Minister Narendra Modi spoke of rationalising and targeting of such benefits.

He also indicated that his upcoming Budget will not resort to “sheer populism” for good ratings, but will focus on structural reforms. He hoped that the Congress will “see reason” and help pass the Goods and Services Tax (GST) Bill.

“Prime Minister had a valid point and the valid point is at the end of the day, the government per se is not against the concept of subsidies,” he said while speaking at The Economic Times Global Business Summit here.

With 25 per cent of the people below poverty line, a very large section of population is entitled to cheap food while the farm sector stress too has to be supported.

“If you look at the whole structure of the Indian economy, its agriculture sector, particularly in the last two years due to the poor monsoon, has been stressed. Therefore, you need to put funds in that particular sector. Therefore, there would be targetted subsidy,” he said.

Arun Jaitley said the Prime Minister had yesterday stated that subsidies are being rationalised and not abolished.

“I think that is the correct statement. They must be targetted to people who are entitled to it, not for the wealthier people,” he made it clear.

Modi, he said, was correcting the “imbalance in the discourse” where rationalisation of subsidies is often construed as abolition of subsidy.

“He said, therefore, there are segments which are entitled to it. Therefore, there would be a target,” Jaitley said, adding people don’t use the same context while giving some kind of tax breaks to other sections of the economy.

India needs a small powerful corporate sector as well as strong powerful agriculture sector, he said. “I don’t think we can put these two sectors in conflict with each other. You need to make sure every sector of the economy grows,” the minister added.

Jaitley said the Indian economy has to be put on a sounder platform. “The Budget has to weigh the areas of weaknesses where investments are required. Therefore, I have to pitch in that direction. If a Budget for the cause of ratings goes in for sheer populism, it’s not necessary that the cause of economics or even sounder politics that we are aiming at (is served).”

Jaitley said the government would not pursue retrospective tax claims and added that he would like the remaining two or three disputes to get resolved “as expeditiously as possible”.

Taxes which are payable must be collected but “there must not be unfair taxes” as unfair assessments bring “bad name” and no revenue, he said.

Hoping that the Congress would support GST that aims to create a unified market across India, he said, “It (GST) is the important reform of the UPA. If I have to credit the authorship of it, I have to give credit to them. Now, If the author turns against his own script, what do I make?

“I have reached out (to the Congress), I have spoken to them. I have explained to them and I hope they will see reason… see the rationale behind passing GST.”

“The UPA allies like RJD, NCP and JD-U are openly supporting it,” Jaitley said, adding that even the Congress-ruled states are for the uniform tax regime.

“I don’t see a reason why they (the Congress) should have a rethink on the Bill. If there is a discussion on a particular idea in the Bill, I am willing to discuss with them. But anything that makes it a flawed legislation… certainly, we can’t bound future generations to a flawed legislation,” the minister said.

Jaitley highlighted the need for carrying on structural reforms, saying the focus should be on infrastructure, irrigation and farm productivity.

“We probably have potential to have a growth that is higher than what we have achieved. This 7-7.5 per cent is not our optimum range. The Indian normal is 8-9 per cent category. And it is only when you grow at that pace, you can get rid of poverty,” he said.

  1. A
    Ashish
    Jan 30, 2016 at 10:13 am
    Bank relationship managers are not to help you for your banking needs but to sell high commission paid products to you. Visit prucentcap dot in to explore more..
    Reply
    1. Rajkumar N
      Jan 30, 2016 at 1:58 pm
      Reservation too meant for backwards cl not based on caste
      Reply
      1. B
        Binit Kumar
        Jan 30, 2016 at 2:31 pm
        Agreed JaitelyJi but doesn't politicians come under this perview? Why do they get subsidies? Are they poor? Are they needy? Any answers?
        Reply
        1. B
          Binit Kumar
          Jan 30, 2016 at 2:33 pm
          Agreed JaitelyJi but why politicians are not brought outside this purview? Are they needy? Are they poor? Then why do they enjoy subsidies?
          Reply
          1. Hemen Parekh
            Jan 31, 2016 at 6:19 am
            STRUCTURAL REFORMS ? Speaking at the Global Business Summit yesterday , Shri Arun Jaitley said : " We will introduce Structural Reforms in the forthcoming Union Budget " What is the current structure of Union Budget ? # SOURCES of REVENUE * Taxes ( Direct Indirect ) * Borrowings ( Domestic Foreign ) * / Leasing of ets ( PSUs Natural National Resources ) # DEPLOYMENT of REVENUE * Administrative Expenses ( ries / Pensions / Maintenance / Subsidies , etc ) * Interest ( Prinl Amount ) on borrowings * Developmental Expenses ( Creation of new ets / Infrastructure ) * Lending Broadly speaking , this is the current structure Most of the time , all that the successive Finance Ministers have done is to slightly " Increase / Decrease " the " Sources and / or Deployment " of the funds , here and there Once in a while , some Finance Minister , even introduced altogether NEW source or a NEW way to spend the revenue ! But so far , no one has attempted to change the FUNDAMENTAL STRUCTURE ! I wonder whether Shri Jaitleyji's BUDGETARY REFORMS would incorporate the following Structural Changes for which , I have sent to him ( and to most of his cabinet colleagues ), dozens of emails ? : * Total abolition of Personal Income Tax ( Revenue Loss of approx Rs 2.5 lakh*crores ) * Introduction of 2% Bank Transaction Tax - BTT ( Revenue Gain of Rs 15 lakh*crores ) * Decreasing Corporate tax slab-rates based on No of permanent employees ( to encourage job creation ) * Perpetual Amnesty Scheme ( no questions asked as to the source for CASH deposits in Jan Dhan Accounts , if funds from these Accounts are invested in Govt approved INFRASTRUCTURE SPVs ) So far , Rs 30,000 Crores have been deposited in Jan Dhan Accounts . With introduction of this REFORM , that figure will rise a thousand times to Rs 30,000,000 Crores , within one year ! These investments will generate 10 million jobs each year and raise our GDP to 10 % in 2016-17 ! * Transferring 10% of GST ( ie 1.8 % out of 18 % ) to PPF accounts of the buyers ( increase Domestic Savings ) * Embedding of RFID chips in Currency Note ( read Kurzweilai ) to solve twin problems of BLACK MONEY and CORRUPTION After second World War , German Economy was in shambles 68 years later , Germans are still thanking their then finance minister , Ludwig Erhard , for the miracle he wrought through his " Out of the Box " reforms to revive the German Economy I hope Shri Jaitley displays similar courage on 29 Feb 2016 - even if he is not bothered being remembered or not ! ------------------------------------------------------------------------------------------------------------------------------- hemenparekh / blogs 31 Jan 2016
            Reply
            1. S
              Satya
              Jan 30, 2016 at 2:56 pm
              Absolutely. Subsidies are meant for needy, the wealthy and ministers need no action by courts against their mischiefs.
              Reply
              1. D
                Dr Velapure
                Jan 30, 2016 at 3:07 pm
                Mr Jetliji are you & all your MPs are so needy & poor to enjoy all subsidies on food, travel, telephone, residence, & many more? Oh God! bless these people they are just destroying sleep of middle-cl after day long hard work & worries .
                Reply
                1. S
                  SK GOLAM
                  Jan 30, 2016 at 2:43 pm
                  ...and the votes too are for the "LAMBS", not the "LIONS", for the under privileged, not the elites.How do you feel,Mr. Jaitely?
                  Reply
                  1. W
                    wts
                    Jan 30, 2016 at 9:54 am
                    speed up infrastructure as cost of steel, cement, capital goods,services are at multi year lows
                    Reply
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