Pressing upon the need for a ‘national vision’ to help the country achieve 6% GDP growth in 2015 and 9-10% soon thereafter, finance minister Arun Jaitley on Saturday said the government was ‘determined’ to take forward reforms — including the crucial ones regarding insurance, taxation, land, labour, planning commission, coal and mining — despite ‘political obstructionism’.
Speaking at industry body Ficci’s annual general meeting, Jaitley, in a veiled attack on parties such as Trinamool Congress and the Left, said these parties are resorting to ‘obstructionist’ tactics and stalling important reforms in Parliament, especially on insurance, to divert attention from their own problems — related to the chit fund scam or having lost the Leftist ideological battle in the country and across the world.
Taking a dig at the Left parties, he said, “It is not West Bengal or Cuba or Russia, but Rajya Sabha that seems to be their last bastion. But the writing on the wall is clear, even in states going to the polls. Once more states give us (BJP) a favourable verdict, the situation in Rajya Sabha (where the BJP-led NDA currently does not have a majority to pass crucial bills, including on insurance) will also automatically correct itself and they (the Left) will lost their last bastion.”
Besides, he said there are enough safeguards in the system and in the Constitution to deal with ‘political obstructionists’. Sources indicate that the Narendra Modi government could consider the ordinance route to pass the Insurance Laws (Amendment) Bill (for hiking foreign investment to 49% from the extant 26%) and the Coal Mines (Special Provisions) Bill (to allow private players in coal mining and for fresh auctioning of 204 coal blocks, the allocation of which were cancelled by the Supreme Court).
On the Land Acquisition Bill, he referred to a ‘problematic’ provision that disallows government-acquired land to be used for building private educational institutions, hospitals and hotels, and said this was coming in the way of the government’s plan to build 100 smart cities. “We need to have a re-look or else such provisions can cause serious damage,” he said.
Referring to a recent meeting with foreign investors, Jaitley said apart from the retrospective taxation introduced by the previous UPA government, these investors saw the difficulties being faced by the Centre in getting the insurance bill passed by Parliament for the past 10 years as the most confidence-shaking aspect.
The government on Friday had tabled in the Lok Sabha a bill to amend the Constitution for laying the framework for a goods and services tax (GST) that would replace most of the central and state levies from April 2016 and create a single national market. This was billed as the biggest tax reform since independence, which is expected to add to the economic growth rate, as well as to the revenue buoyancy of central and state governments.
On taxation matters, the FM said though the Opposition keeps insisting that the government must recover all taxes foregone and put a halt to all tax incentives, it was not pragmatic, as such incentives are resulting in additional economic activity and job creation. Also, aggressive taxation steps such as retrospective tax have not brought in money for the exchequer, as these have been quashed/stayed by courts, but have just given the country a ‘bad name’.
Therefore, the new government has ‘eliminated’ the fear of retrospective taxation by promising investors that it will not use such powers, he said.
The insurance bill, despite being approved by the standing committee of Parliament and select committee of Rajya Sabha, is still not on Parliament’s agenda, while the coal bill, which was unanimously passed by Lok Sabha, was not allowed to come on Rajya Sabha’s agenda for discussion by political obstructionists, Jaitley said.
The FM, who would be presenting his first full budget in February, said: “The clear choice before us is, either we reform or we miss the bus once again. The new government, despite various challenges, is absolutely clear that the course we have adopted is unalterable. There is slowdown in a very large part of the world and investors are looking to come into India. We still have a large number of areas where we have to reform.”
On stalled projects, he said, the Prime Minister himself is looking into them to ensure they are fast tracked. On revamping the planning commission, Jaitley said it was important to dismantle its ‘control-and-command’ structure as the requirements of the states were different and could not be decided by the Centre alone. “We are looking at strengthening cooperative federalism to ensure credibility of our policies and decision making process,” he said.