 "Historic moment, please cooperate, FM tells Oppn")
Replying to the debate on the Appropriation Bill in the Lok Sabha, the first step in passing the Budget, Jaitley said after the increase in devolution to states to 42 per cent from 32 per cent, these have been allocated Rs 1.86 lakh crore more than in 2014-15, in addition to grants for municipal bodies and gram panchayats, Rs 24,190 crore more than in the current financial year.
However, he said since the Centre had decided to keep most of the centrally sponsored schemes (CSS) under its ambit, instead of delinking almost all of them to the states, as suggested by the finance commission, the allocation to states for these schemes for 2015-16 would be Rs 75,000 less than in 2014-15.
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“Twenty-three centrally sponsored schemes will be fully funded by the central government, 13 will be partly funded by the Centre and states, and eight CSSs have been delinked, to be fully funded by the states,” Jaitley told Lok Sabha members.
With key Bills such as those related to land acquisition, mines and minerals, and coal stuck in the Rajya Sabha, Jaitley appealed to the Opposition not to be “obstructionist”, adding there was an opportunity for India’s economic growth to outstrip China’s.
“This is a historic opportunity where India has a real chance of growing. The world also sees India as a bright spot. We must use this opportunity,” Jaitley said. “I appeal with folded hands ... let politics of obstructionism not go to next stage.”
Jaitley forecasted gross domestic product (GDP) would grow more than eight per cent in 2015-16, adding he was “hopeful” of current account deficit being less than one per cent of GDP in the coming financial year.
Elaborating on some of the major Budget announcements, the finance minister said he had proposed reducing corporate tax to 25 per cent from 30 per cent over the next four years keeping in mind the rates prevalent in competing economies, especially in Southeast Asia.
“The global corporate tax rate is 23.64 per cent, the Asean [Association of Southeast Asian Nations] average is 21.9 per cent, for Europe it’s 19.68 per cent. We want to attract investment from home as well as abroad. Who will invest in India if tax is 30 per cent?” He added the idea was borrowed from the proposed Direct Taxes Code prepared by his predecessor, P Chidambaram.
Although the tax rate was 30 per cent, only 23 per cent was realised because of concessions given to companies over the years, Jaitley said. The government, he added, would remove the exemptions even as it gradually reduced the rate.
To those who complained the middle class had been ignored, Jaitley said the government had exempted taxpayers to the tune of Rs 1.7 lakh in two Budgets over the past year — Rs 1 lakh last year and Rs 70,000 this year. He added investment up to Rs 50,000 for pension had also been exempted.
On black money, Jaitley said the government would bring a new legislation in the current session of Parliament with provisions such as 300 per cent penalty and punishment up to 10 years for concealing foreign assets. He said assessment of all the names on the black money list with the government would be completed by March 31.
When members in the Opposition benches accused the government of not passing on the entire benefit of falling crude oil prices, Jaitley said oil public sector undertakings could not be allowed to “die” as they were suffering losses to the tune of Rs 30,000 crore on inventory.
Justifying the government’s bid to open more sectors to foreign investment, he said more funds were required to create jobs, develop infrastructure and undertake social welfare programmes. In a message to the Reserve Bank of India, Jaitley said without a reduction in interest rates, growth would suffer.
The Appropriation Bill, or the Vote-On-Account, was later passed by a voice vote, completing the first phase of the budgetary exercise in the lower House.
| FINANCE MINISTER’S BUDGET REPLY |
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