Asserting that economic progress cannot be a partisan issue, government tonight sought cooperation of the opposition to ensure that India achieves double-digit growth as he contended that “obstructionism” could only provide temporary “sadistic thrill”.
Finance Minister Arun Jaitley rejected the charge of being pro-corporate and underlined that the country needs high growth for creation of jobs, addressing social issues and development of infrastructure.
He was replying to a debate in the Rajya Sabha on Appropriation Bill 2015-16, which was later approved by a voice vote, marking completion of the first phase of the budgetary exercise.
“India’s growth rate is not NDA/UPA issue,” Jaitley said, adding the country has a historic opportunity for growth and pleaded with the opposition not to “obstruct or delay” the reform process in “one way or the other”.
“We need larger consensus on growth roadmap… Obstructionism can have a sadistic thrill, but that can only be temporary,” he said.
Advocating the need for pushing reforms, he said, “Unless the economy grows at a faster pace… India’s normal (growth) is 8-9 per cent and we are targeting a double-digit growth. Indian normal cannot be 4-5 per cent growth where you can barely pay salary and undertake essential expenditure.”
His appeal came at a time when some key reform legislations like Land Acquisition Bill, Coal Bill and Mines and Minerals Bill are stuck in the House because of stiff opposition by some parties.
“Obstructionism can be a temporary tactic. At times, it can be a strategy but it cannot be a long term ideology. Therefore some of the reforms which the UPA started, which we are taking a shade forward, should be cooperated with, rather than being obstructed in one manner or the other or even delayed,” the Finance Minister said.
India’s growth is likely to be 7.4 per cent in the current fiscal and improve to 8-8.5 per cent in the 2015-16.
“Unless we increase revenue, (unless) our tax buoyancy goes up because of growth rate, you won’t be able to spend on development and hence there will be no growth and you won’t have money to service the poor,” Jaitley said.
“Therefore, our effort has to be that growth has to go up and additional resources which come out of growth have to be used to service the poor of this country. This is how poverty alleviation schemes work,” he added.
Asserting that the government was keen to improve ease of doing business in India, he said, “We need competitive interest rate, we need competitive tax rate, we need stability in taxation rate, we need a system free from corruption.”
Rejecting the charge that the government is pro-rich, he said taxes for the corporates have to be competitive globally so that investors can look at India for pumping in funds.
In this context, he said his move to bring down corporate tax from 30 per cent to 25 per cent over next four years was aimed at alligning them with other countries. He mentioned that the rate was 23 per cent globally, 21.9 in ASEAN and 19.6 in Europe.
Rejecting suggestions by some opposition parties for hiking corporate tax, Jaitley questioned which investor would come to India in that scenario.
He said he had decided to reduce corporate tax, taking cue from the Direct Taxes Code (DTC) prepared by former Finance Minister P Chidambaram.
Taking a dig at Chidambaram for criticising the budget, he said, “my predecessor has been kinder to me as compared to his own predecessor”, apparently referring to Pranab Mukherjee.
Referring to the new legislation on black money, he said, “we are going to make sure that there is no scope for misuse, but at the same time there is a deterrent for those who stock money abroad.”
The government is likely to table the new legislation on black money tomorrow in the Lok Sabha.
Referring to the cancellation of telecom licences by the Supreme Court, Jaitley said it was a “low” for the country as investors suffered because of corruption and even did not get back their money.
He said investors would not come forward if there is no tax clarity or government goes for retrospective taxation.
Responding on questions related with bad debt of public sector banks, the Finance Minister said the NPA situation would improve in next few years with the revival of the economy.
He also said rupee is one of the few currencies in the world which is keeping pace with American dollar.
On the need to raise tax-to-GDP ratio, he said the government is keen to enhance it, but not through higher taxes.
Jaitley also stressed that expenditure has not be squeezed under any social sector scheme and implementation of recommendations of the 14th Finance Commission would result in Rs 1.86 lakh crore higher funds to states from the centre.
“Not one state says I want to go back to 13th Finance Commission,” he added.
Talking about the coal auctions, he said it has already yielded Rs 2.13 lakh crore and states would benefit from the proceeds. He said auction will benefit states.
Taking a dig at the Congress, which criticised CAG report on coal blocks, Jaitley said: “somebody in the earlier government who thought that these coal blocks and other resources were worth zero…Now it appears that the CAG has been very kind when he estimated those losses”.
He also said fiscal deficit and current account deficit were under control while the forex reserves were high.
The Finance Minister also highlighted the steps government announced in budget for the middle class.