Government is trying to create a conducive environment, both in terms of taxation and ease of doing business, as investments won’t come just by opening doors, said Finance Minister Arun Jaitley.
The new government has endeavoured to restore credibility of the Indian economy and the decision making process in order to boost investments, domestic as well as foreign, he said addressing investors at the ‘Urja Sangam’ conference.
The government, he said, is focusing on “quick and effective decision making”, as the country needs huge amount of investments.
“Investment has to be both domestic and international and for that we have to in the first instance open our doors for that investments. But merely by opening doors, investments won’t come,” Jaitley said.
The Finance Minister, who presented his first full year budget last month, said investors expect a conducive environment and a reasonable return.
“…and for that conducive environment, what we popularly call ease of doing business… slowly but surely we have been taking steps in that direction,” he said.
The Finance Minister stressed on rationalisation of subsidy regime.
“At some point of time, India will have to take a decision as to distinguish between those who can afford to pay and those who cannot afford to pay. And those who cannot afford to pay must get benefit of state support,” he said while referring to subsidy on cooking gas.
Jaitley said the government will have to make efforts to rapidly reduce dependence on energy imports as suggested by Prime Minister Narendra Modi.
“…so our own exploration programme, within the resource available, our own efforts for acquisition of assets internationally are all areas we will have to look at…,” he said.
Jaitley further said that the government is undertaking some of the most significant taxation reforms.
He told the gathering that in the second part of the Budget Session, starting April 20, the government intends to go ahead with the Constitutional Amendment Bill on the GST, an ambitious indirect tax reform.
“I already said with regards to taxation, direct or indirect, the regime of enacting retrospectively or taking people by surprise is now over. Our effort is to make direct taxation system not only non-adversarial but also globally compatible,” he added.
Talking about the slump in global oil prices, Jaitley said both the government as well as the domestic oil companies have taken “very responsible positions”.
“Huge benefits have been transferred to consumers. This in turn helped us in containing inflation, which in turn has reversed the need of the increasing interest rates, at least we had two reductions (by the RBI…,” Jaitley added.
As part of making taxation system globally compatible, Jaitley said he has announced a roadmap for next four years to bring down the corporate tax from 30 per cent to 25 per cent in a phased manner and do away with exemptions.
The new government has taken several steps to attract investors, which include raising FDI ceiling in defence and insurance sectors, in addition to opening the railway infrastructure segment, to foreign investors.
Earlier in the day, while referring to India’s 77 per cent dependence on energy imports, Modi said the effort should be to reduce it by 10 per cent by 2022, when India will celebrate 75 years of Independence.