One year of Narendra Modi Govt: We gave one year of corruption-free governance, says Arun Jaitley

He also attacked the Congress for positioning itself as anti-growth and anti-development by obstructing reforms measures like GST and amendments to the land acquisition law.

Speaking to reporters on completion of one year of the Narendra Modi-led government, the Minister said: “A very important highlight of the government has been to give a corruption-free administration to the country. The common man has been freed from political corruption. We have done it in one year.”

Jaitley also expressed the government’s commitment to GST and the land acquisition bill, besides promising more funds for rural development and infrastructure.

The economy is growing at 7.5-8 per cent, he said, adding that there is a restlessness to grow even faster which is the real potential of the country.

Highlights:

1. We have given corruption free administration in last one year: Finance Minister Arun Jaitley

2. Pace of decision making has increased in the last one year: Arun Jaitley

3. Our priority is to get the GST and land bills passed by Parliament: Arun Jaitley

4. Notifications with regard to Black Money Bill will be issued shortly: Arun Jaitley

5. Misuse of investigation agencies is a thing of the past: Arun Jaitley

6. Govt will make every effort to meet GST roll-out deadline of April 1, 2016: Arun Jaitley

7. Home Ministry’s notification on LG’s powers will help remove confusion: Arun Jaitley

8. Inflation control has been a positive achievement of the government: Arun Jaitley

9. India has the potential to achieve double-digit growth rate: Arun Jaitley

10. ‘One Rank One Pension’ for defence personnel is unambiguous commitment of the govt and will be implemented: Arun Jaitley

11. We are reforming and liberalising but there is no place for crony capitalism: Arun Jaitley

“One year back, there was an environment of pessimism… there was general environment of gloom. In its place, an environment of enthusiasm has been created,” he said, adding that decisiveness even in the face of obstructions has been the hallmark of the Modi government.

India, he said, “has potential to touch double-digit growth rate” provided decision-making is quick.

“We are reforming and liberalising, but there is no place for crony capitalism,” he said, observing that it was the unclear economic policies that led to the fall of the UPA government.

The current government, Jaitley said, is both pro-growth and pro-development.

“Our social security programmes are going to be one of the strongest ever in this country, but certainly the policy will be one of arms-length distance in terms of decision-making from individual business houses,” he asserted.

Jaitley said the government has been able to provide a transparent system of governance through a host of initiatives such as auction of natural resources like coal and spectrum.

The government has acted decisively and with speed on all fronts, he said, adding “those who are used to slow decision-making are criticising it (government) for making fast decisions… the country is not willing to accept slow decision-making.”

Also, “there is absolute clarity of direction in which the government wants to go… that is to promote growth and development and bring in more transparency in governance.”

As regards taxation, Jaitley said the government is in favour of keeping it simple and intends to use “taxation as an instrument for promoting growth.”

Describing the proposed Goods and Services Tax (GST) as a “historic” reform, the Minister said most of the states are on board and the Centre would make every effort to roll out the new tax regime from April 1, 2016.

The Constitutional Amendment Bill to roll out the GST was referred to the Select Committee which is scheduled to submit its report to Rajya Sabha on the first day of the next session of Parliament.

The Bill has already been approved by Lok Sabha.

The GST, which will subsume various indirect taxes like excise, service tax and local levies, will result in a uniform tax regime throughout the country.

As far as direct taxes are concerned, Jaitley said the government proposes to bring down the rate of corporate tax at par with global levels and reduce discretionary exemptions.

The government plans to bring down the rate of corporate tax from 30 per cent to 25 per cent over a period of four years.

“Higher tax rates are never investor friendly…never economy friendly,” Jaitley asserted.

For individuals, Jaitley said, leaving more money in the hands of the people will be good for the economy as their savings boost development efforts.

The Minister added that the Revenue Department will come out with revised and simplified Income Tax Return (ITR) forms.

The controversial ITR forms were put on hold by the Central Board of Direct Taxes (CBDT) last month after opposition from industry, assesses and Members of Parliament because of the cumbersome disclosure requirements with regard to details of bank accounts and foreign visits.

On a specific question on levy of Minimum Alternate Tax (MAT) on Foreign Institutional Investors (FIIs), the Minister said that he had clarified in his budget speech that it would not apply on FIIs from April 1, 2015.

The old cases will be decided through judicial process, he added.

Jaitley also expressed the hope that various legacy issues, which have been creating problems for the investors, would end soon.

The Indian tax regime should be competitive and non-adversarial, he said, observing that none of the decisions taken by his government led to any dispute.

On the initiatives taken to unearth black money, the Minister said notification with regard to compliance window under the new black money law will be issued shortly.

Parliament has approved the Black Money Bill to deal with the menace of illegal wealth stashed abroad.

The Bill provides for a short compliance window for those who want to come clean by declaring their unaccounted wealth and paying a tax and penalty of 60 per cent.

Those who don’t take advantage of the compliance window will have to pay 30 per cent tax, 90 per cent penalty and face jail term which could extend up to 10 years.

Inflation control is one of the positive achievements of the government, Jaitley said, adding that the Centre’s efforts have also helped in reducing fiscal deficit and current account deficit (CAD).

The quality of fiscal deficit too has improved as there are no hidden items which are reflected in the figures, he said.

The government, the Minister said, will go ahead with the disinvestment and strategic stake sale programmes to achieve the ambitious target of Rs 69,500 crore in the current fiscal.

The government is working to strengthen cooperative and competitive federalism, Jaitley said, adding that implementation of the recommendations of the 14th Finance Commission will improve the financial position of states.

Mine-bearing states would also get additional resources from the auction of coal mines, he added.

Moreover, he said, NITI Aayog is effectively involving the state Chief Ministers in preparation of the developmental programmes.

Referring to overseas visits of Prime Minister Narendra Modi, Jaitley said the PM toured 18 countries in the last one year and the nation has earned a special place for itself in the world.

India’s efforts in dealing with the crisis in different parts of the world was appreciated globally, he added.

He further said that government took several initiatives for development of infrastructure sectors like railways and highways and is preparing a scheme to set up smart cities.

Arun Jaitley thinks it’s now time for rate cut
Days ahead of the monetary policy review, Finance Minister Arun Jaitley today said it’s time for RBI to cut rate in view of moderation in inflation and subdued industrial growth.

When asked if it’s time for RBI to cut interest rate, Jaitley replied in the affirmative.

“My views are well-known. It is (the time),” he said at a press conference on completion of one year of the government.

The Reserve Bank of India (RBI) is scheduled to announce its monetary policy on June 2.

The central bank has lowered its policy rate twice so far in 2015, but maintained status quo at the recent policy meet on April 7 in the wake of unseasonal rains impacting food prices.

The repo, the rate at which the RBI lends to banks, is currently 7.5 per cent and the cash reserve ratio (CRR), the amount of deposits that lenders park with the central bank, 4 per cent.

According to analysts, the mix of slowing inflation and a weaker-than-expected growth is building the case for a softer policy. While a rate cut on or before June 2 is most likely, beyond that, any room for additional rate cuts depends on structural reforms of the government.

However, there is risk of monsoon being lower than average, potentially affecting crop production.

Retail inflation eased to a 4-month low of 4.87 per cent in April while industrial output slowed to a 5-month low of 2.1 per cent in March.

At wholesale level, the deflationary pressure has persisted for the sixth month in a row, with WPI inflation now at a new low of (-)2.65 per cent in April.

These macro economic indicators strengthen the government’s and the industry’s call for a lower rate regime.

“We are penciling in a 25 per cent repo rate cut by RBI on June 2 or even before that,” SBI said had said in a research note.

According to experts, the next round of rate cut may now be driven more by growth considerations as inflationary momentum is likely to remain subdued.

“We are convinced that retail inflation trajectory will be significantly benign on the back of a loss of purchasing power in rural economy,” the SBI had said, adding that “if inflation numbers stay below 5 per cent, there is an outside chance of an additional 0.25 per cent cut”.

Govt confident of land bill passage
Government today exuded confidence that land bill will be passed in the next Parliament session, saying “the numbers are very clear”.

Addressing a press conference to highlight the achievements of Narendra Modi government in its first year, Finance Minister Arun Jaitley termed the Land and GST bills as government’s top priorities for the coming year, saying “decisiveness even in the face of obstructionism is the hallmark” of this regime.

He accused the Congress, which has opposed the land bill, of obstructing India’s journey to 10 per cent growth by positioning itself against government’s pro-growth and developmental initiatives and asked the principal opposition party to reconsider its position.

“No political party has a right to say I will not allow it to be passed. They have a right to vote against it. And when a political party says I will vote against it, the numbers will eventually decide whether it will be passed or not. And I think the numbers are very clear,” Finance Minister Arun Jaitley said.

Asked about Rahul Gandhi’s attacks on Modi over his foreign trips, he took a dig at the Congress Vice President’s long sabbatical, saying, “Going out on a 55-day vacation is a foreign journey and representing the country abroad, going on a state visit, is a different kind of programme.”

Hinting at the support of regional parties for the passage of crucial bills in Parliament, he said central government’s attitude towards states in “empowering and enriching” them has made a clear political impact.

He said the first year of the government was a directional year where every department worked overtime to put the country on the fast pace of growth and development and change the general sense of gloom before the government took over into optimism.

He said only those who are unhappy with this fast pace have become its critics.

“The country is not ready to accept slow pace of decisions. There is absolute clarity with regard to direction in which the government wants to move. The direction is towards growth and development.

“A very important highlight of this government has been to give a corruption-free administration to this country…It has been an important year, a directional year and a direction at a very fast pace,” he said.

Terming the 2013 land bill brought by UPA as one that was against rural areas and farmers, Jaitley said the 2015 Bill sought to remove its shortcomings.

He said the 2013 land bill stalled growth of infrastructure, irrigation,industrialisation and housing. It was against rural areas and farmers and the 2015 land bill corrects these shortcomings.

Hitting out at the Congress, he said, “When we obstruct, we must realise that it is eventually that yearning for 10 per cent that we are obstructing. I have no hesitation in saying, the principal opposition party has positioned itself against growth and development. They must reconsider their position in terms of the damage they can do.”

He admitted that blending clever politics with good governance was necessary and BJP was conscious of this and has learnt from its experiences.

“Good governance always has to be blended with clever politics. Therefore, we are conscious of this. It is for this reason that our party has been extremely active in forging alliances whereever necessary, expanding social bridges, expanding membership. And therefore we are conscious of…even our past experiences, we have learnt from it.”

Jaitley also highlighted that in the last one year investigative agencies have not been misused by the government against political opponents as done in the past.

“That is now an event of the past. Honest people run the agencies honestly now,” he said.

Talking of the recent social security measures for public, he said it will help the large unpensioned society in the country and improve penetration of insurance cover.

Jaitley said the ‘One Rank One Pension’ scheme for defence personnel will be implemented as it is “unambiguous commitment of the government”.

He said the Ministry of Defence is in dialogue with various stakeholders on the methodology of calculation of pension of ex-servicemen.

Keeping fingers crossed on bad loans: Jaitley
Terming NPAs at 5.2 per cent as high, Finance Minister Arun Jaitley today said it’s too early to consider the improvement in the bad loan situation last quarter as a “turnaround” and was keeping his fingers crossed.

“I would take it (drop in March quarter NPAs) only as an initial indicator. At times, when you try to revive the economy, some indicators can always be patchy…I am not drawing any final conclusion from this,” Jaitley said.

“If this pattern continues over 2-3-4 quarters, then I will draw a conclusion that there is a pattern. I am keeping my fingers crossed,” he said.

Addressing a press meet on one year of the Modi government, he said: “A good signal has emerged that the quarter that ended in March 2015, NPAs have started coming down… This is the first quarter, NPAs in banks were increasing, they have started coming down.”

Non-performing assets or bad loans of the total advances had reached a high of 5.64 per cent but period ending March “it has come down to 5.2 per cent…these (5.2 per cent NPA) are also high”, he said.

From the decline in one quarter it cannot be concluded that this was a turnaround, he said.

As of December 2014, gross NPAs of PSU banks were at Rs 2,60,531 crore or 5.6 per cent of the total advances.

Echoing similar views the Reserve Bank Governor Raghuram Rajan had said last week that there was no danger of any financial crisis but it may be early to declare that the worst was over on the NPA front.

The Governor said resolution of NPAs will be possible only with higher economic growth, which he termed as “slow” and the actions which the banks take.

The Finance Minister too said that when economy picks up, a “turnaround has to take place” in the banking sector.

“Therefore, the steps in the direction of economic growth is one…we have to do the recapitalisation (of banks) fast,” Jaitley said.

He also said steps are being taken to professionalise the banks’ boards as appointments would be made through bank bureau.

He also said the vacancies at the top posts in the three banks will be filled by next month.

These banks are PNB, Bank of Baroda and Canara Bank where posts of MD and CEO are lying vacant for many months.

However, two more vacancies will be created this month-end as CMD of Bank of India and IDBI are retiring.

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