The government’s attempt to raise public spending on infrastructure, which was visible in the last Budget that provided an extra outlay of Rs 70,000 crore with focus on railways and roads, would be sustained in the next fiscal with a renewed focus on rural infrastructure, finance minister Arun Jaitley indicated on Thursday.
“Rural infrastructure and irrigation are sectors with huge investment potential. We want a lot more spending in these sectors,” said Jaitley. In the budget for 2015-16, Jaitley had announced R1 lakh crore support for agriculture credit and a R5,300-crore support for micro-irrigation. Currently about 60% of the country’s farmland is rain-fed and, hence, susceptible to weather shocks. The emphasis on irrigation comes at time when monsoon is forecast to be below normal in 2015.
Modi government will, in its second year in office, explore strategic disinvestment of some state-owned companies and strive to get the Bill on land acquisition passed into law, Jaitley told reporters.
In the hectic Budget session that concluded on Wednesday, the Modi government got the the Finance Bill, 2015, passed with some changes that allayed industry’s fears on taxation and got a Bill to crackdown on black money also approved by the House, but was forced to refer a Bill on goods and service tax (GST) to a select panel of Rajya Sabha and the contentious land Bill to a joint committee of parliamentary affairs.
The government would also pursue its disinvestment programme and possible capital infusion to the extent of ownership change in at least some entities that are loss making and are on the brink of closure. “When I say strategic, there are some on which there is no difficulty in even strategic sales. I think the ministry of tourism itself may take some initiatives,” the minister said. One listed PSU under the tourism ministry is ITDC. There are several other unlisted properties, including hotels. Jaitley plans to raise R28,500 crore through strategic sale this fiscal over and above R41,000 crore to be raised through divestment of minority stakes in PSUs. The previous NDA government had sold off majority stakes in Hindustan Zinc and Balco to the Vedanta Group between 2001 and 2003, but the subsequent two UPA regimes did not resort to privatisation of state-run firms.
Jaitley assured that referring the Bill on land acquisition to a joint committee of Parliament was the fastest way of taking the piece of legislation to its logical conclusion and expressed confidence that the select panel of Rajya Sabha reviewing the GST Bil would wholeheartedly support it.
The Modi administration is pinning hopes on the Congress party supporting the Constitution (122nd Amendment) Bill, 2014 when it would be considered by Rajya Sabha after its review by the select panel. “I would only hope that the principal opposition party would understand the significance of the April 1, 2016 deadline (for introducing GST) at this point of time,” he said.
The minister said provisions of the Undisclosed Foreign Income and Assets (Imposition of Tax) Bill, 2015 were not draconian as complained by some. The Black Money law that provides for stringent punishment for not disclosing income and assets stashed abroad was “fairly reasonable,” he said. “For those who do not have illegal assets, there is nothing to worry,” said Jaitley. Revenue Secretary Shaktikanta Das explained that the compliance window will be given in the current financial year itself.
The minister countered the criticism that many Bills were being presented in Parliament as money bills, which the Upper House of Parliament, in which BJP is a minority, was obliged to endorse. Jaitley said the practice of the indirectly elected House questioning the wisdom of the directly elected House was okay once in a while, but “ that cannot happen Bill after Bill and session after session.”