 "Budget to serve the cause of economics, not populism: FM")
Finance Minister Arun Jaitley on Saturday said the Budget would be designed to help the economy sustain eight to nine per cent growth and investments in infrastructure and irrigation might continue.
In an interaction with a television news channel at the Global Business Summit, Jaitley also hoped the Congress would help the government clear the Goods and Services Tax (GST) Bill in the Budget session of Parliament.
He said only a couple of tax disputes with multinational companies were pending and these would be settled soon. Vodafone and Cairn have dragged the government into arbitration over tax claims.
"The Budget has to weigh the areas of weaknesses where investments are required. I have to pitch in that direction. If a Budget goes in for sheer populism, it is not necessary the cause of economics or even politics (is served). The economy has to be on a sounder platform," Jaitley said.
He said he had come across all shades of opinion on the fiscal consolidation road map. Industry wanted more spending, he said, and economists were divided. A third opinion was not to tie the government to any fiscal deficit target in a dynamic situation, he added.
Reserve Bank of India Governor Raghuram Rajan on Friday advised the government not to defer the fiscal consolidation road map. A majority of economists polled by Reuters, however, wanted Jaitley to postpone the road map for another year.
The target of reining in the deficit at three per cent of the gross domestic product (GDP) was to be originally met next year but was deferred to 2017-18. For the current financial year, the target was relaxed to 3.9 per cent from the original 3.6 per cent. As much as 88 per cent of the target was met by December.
Jaitley highlighted the need for carrying on structural reforms, saying the focus should be on infrastructure, irrigation and farm productivity. "This 7-7.5 per cent (growth) is not our optimum range. The Indian normal is eight to nine per cent. Only when you grow at that pace you can get rid of poverty," he said.
Responding to Prime Minister Narendra Modi's statement on Friday on incentives to companies, the finance minister said subsidies must be targeted better. "We are in favour of rationalisation of subsidies, not their abolition," he said.
Jaitley hoped the Congress would support the GST, which aims at creating a unified market across India. "I have reached out (to the Congress) and I hope they will see reason. UPA allies like the RJD, NCP and JD-U are openly supporting it," he said, adding even Congress-ruled states were for the uniform tax regime.
"I don't see a reason why they (the Congress) should have a rethink on the Bill. If there is a discussion on a particular idea in the Bill, I am willing to discuss with them. But anything that makes it a flawed legislation… certainly, we can't bound future generations to a flawed legislation," the minister said.
Jaitley spoke of India's human resource pool and large market as positives. "We have the potential for increasing manufacturing. We have innovative skills. Our labour cost is not rising as in China," he said. To a query on limited job opportunities, he said the government and the corporate sector faced limitations in generating emplo-yment. The government was fo-cusing on entrepreneurship th-rough the Mudra Bank, he said.
The finance minister said the world economy was doing badly because of the slump in oil and commodity prices. The slump "suits us because we are net buyers of these", he said, adding "what we have to do is to put our house in order. We have to carry on structural reforms." Jaitley said since coming to power, the NDA government had decided not to use retrospective tax legislation to raise revenue. A number of issues were settled by courts and the government decided not to appeal against rulings that went against it. "The spiral effect of that is dozens of cases are now being settled," he said. "Today, 18-19 months after this government has taken over, there are about two or three of those issues left. I would like to see them sorted out as expeditiously as possible either through a tribunal or judicial process," he added.
In an interaction with a television news channel at the Global Business Summit, Jaitley also hoped the Congress would help the government clear the Goods and Services Tax (GST) Bill in the Budget session of Parliament.
He said only a couple of tax disputes with multinational companies were pending and these would be settled soon. Vodafone and Cairn have dragged the government into arbitration over tax claims.
"The Budget has to weigh the areas of weaknesses where investments are required. I have to pitch in that direction. If a Budget goes in for sheer populism, it is not necessary the cause of economics or even politics (is served). The economy has to be on a sounder platform," Jaitley said.
| WHAT ARUN JAITLEY SAID |
| ON BUDGET “The Budget has to weigh the areas of weaknesses where investments are required. I have to pitch in that direction. If a Budget for the cause of ratings goes in for sheer populism, it is not necessary the cause of economics or even politics (is served). The economy has to be on a sounder platform” ON SUBSIDIES “We are in favour of rationalisation of subsidies, not their abolition” ON RETROSPECTIVE TAXES “Today, 18-19 months after this government has taken over, there are about two or three of those issues left. I would like to see them sorted out as expeditiously as possible either through a tribunal or judicial process” |
He said he had come across all shades of opinion on the fiscal consolidation road map. Industry wanted more spending, he said, and economists were divided. A third opinion was not to tie the government to any fiscal deficit target in a dynamic situation, he added.
Reserve Bank of India Governor Raghuram Rajan on Friday advised the government not to defer the fiscal consolidation road map. A majority of economists polled by Reuters, however, wanted Jaitley to postpone the road map for another year.
The target of reining in the deficit at three per cent of the gross domestic product (GDP) was to be originally met next year but was deferred to 2017-18. For the current financial year, the target was relaxed to 3.9 per cent from the original 3.6 per cent. As much as 88 per cent of the target was met by December.
Jaitley highlighted the need for carrying on structural reforms, saying the focus should be on infrastructure, irrigation and farm productivity. "This 7-7.5 per cent (growth) is not our optimum range. The Indian normal is eight to nine per cent. Only when you grow at that pace you can get rid of poverty," he said.
Responding to Prime Minister Narendra Modi's statement on Friday on incentives to companies, the finance minister said subsidies must be targeted better. "We are in favour of rationalisation of subsidies, not their abolition," he said.
Jaitley hoped the Congress would support the GST, which aims at creating a unified market across India. "I have reached out (to the Congress) and I hope they will see reason. UPA allies like the RJD, NCP and JD-U are openly supporting it," he said, adding even Congress-ruled states were for the uniform tax regime.
"I don't see a reason why they (the Congress) should have a rethink on the Bill. If there is a discussion on a particular idea in the Bill, I am willing to discuss with them. But anything that makes it a flawed legislation… certainly, we can't bound future generations to a flawed legislation," the minister said.
Jaitley spoke of India's human resource pool and large market as positives. "We have the potential for increasing manufacturing. We have innovative skills. Our labour cost is not rising as in China," he said. To a query on limited job opportunities, he said the government and the corporate sector faced limitations in generating emplo-yment. The government was fo-cusing on entrepreneurship th-rough the Mudra Bank, he said.
The finance minister said the world economy was doing badly because of the slump in oil and commodity prices. The slump "suits us because we are net buyers of these", he said, adding "what we have to do is to put our house in order. We have to carry on structural reforms." Jaitley said since coming to power, the NDA government had decided not to use retrospective tax legislation to raise revenue. A number of issues were settled by courts and the government decided not to appeal against rulings that went against it. "The spiral effect of that is dozens of cases are now being settled," he said. "Today, 18-19 months after this government has taken over, there are about two or three of those issues left. I would like to see them sorted out as expeditiously as possible either through a tribunal or judicial process," he added.