 "We found right balance in wanting to reach fiscal gap target at 3.9%: Arun Jaitley")
At a post-Budget press conference, Union Finance Minister Arun Jaitley says he would have liked to reduce the corporate tax in this Budget. He sees strategic disinvestment in profit-making as well as loss-making public sector undertakings. Excerpts:
How do you propose to balance growth with fiscal prudence? You have delayed the implementation of the Fiscal Responsibility and Budget Management Act. Could you explain the rationale?
We are working on higher growth rates and are anticipating these will be better this year at 8-8.5 per cent.
You talked about increasing infrastructure spending. How do you propose to do that?
We have decided to explore other avenues on infrastructure spending. We will find funds for that purpose. In this Budget, we have decided to concentrate on manufacturing.
We found a mention of strategic divestment. Does it hold true for only loss-making public sector undertakings?
It does not necessarily mean that. We are not averse to selling stake. Strategic sale was always a part of the Centre's disinvestment plan. The United Progressive Alliance regime decided not to use it. We do have a road map, but do not expect any names right now.
You talked about the Goods and Services Tax (GST): How it will do away with all the indirect taxes. Can you throw some light on what lies ahead for its roll-out?
The empowered committee on GST will decide on a new chairman. We will have the first round of meetings, as soon as the new chairman is appointed. We hope the constitutional changes to the GST Bill will be passed in this Budget session
This was touted to be a Make-in-India Budget and you did speak about boosting domestic manufacturing. What you did not speak about was Special Economic Zones and ways to incentivise these, including reducing the Minimum Alternate Tax and the reduction on tax liability. Any clarity?
What is there in the Budget is there, and what is not there, is not there. Any Budget is driven by the revenues and the fiscal space. In the end, the Budget has to balance its figures.
Former prime minister Manmohan Singh said the Budget has good intentions but does not have an adequate road map. What do you have to say?
I can only say thank you.
Everyone, including foreign investors, was looking at this Narendra Modi government's first full-year Budget for Big-Bang reforms, but these did not come through.
How do you define Big-Bang reforms? You tell me what that means. Everyone who comes and tells me to initiate Big-Bang reforms, I ask them that question, but I have never got an answer.
The Budget spoke about changes to the Reserve Bank of India Act for setting up a monetary policy framework. When will it be taken to Parliament to be changed?
Finance Secretary Rajiv Mehrishi: The monetary policy panel is part of this year's Budget. We assure you, it will come sooner rather than later.
For reduction in corporate tax rates, you have suggested it will happen over four years and exemption would also be removed. Can you give us a timeline?
I would have liked to reduce the corporate tax in this Budget. But we needed the corporate sector to be ready to implement the proposed change.
We have generally been viewed as a nation with a high tax rate and that has led to a loss of revenue because of specific exemptions and loss of image as a nation to invest in.
I want to give a signal to investors that India is a destination to invest in.
How do you propose to balance growth with fiscal prudence? You have delayed the implementation of the Fiscal Responsibility and Budget Management Act. Could you explain the rationale?
We are working on higher growth rates and are anticipating these will be better this year at 8-8.5 per cent.
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If we stuck to a fixed deficit target of 3.6 per cent, we had to cut a large part of the public spending, as the recommendation was before the 14th Finance Commission. We found the right balance in wanting to reach the fiscal deficit target at 3.9 per cent of gross domestic product (GDP) for this financial year.
You talked about increasing infrastructure spending. How do you propose to do that?
We have decided to explore other avenues on infrastructure spending. We will find funds for that purpose. In this Budget, we have decided to concentrate on manufacturing.
We found a mention of strategic divestment. Does it hold true for only loss-making public sector undertakings?
It does not necessarily mean that. We are not averse to selling stake. Strategic sale was always a part of the Centre's disinvestment plan. The United Progressive Alliance regime decided not to use it. We do have a road map, but do not expect any names right now.
You talked about the Goods and Services Tax (GST): How it will do away with all the indirect taxes. Can you throw some light on what lies ahead for its roll-out?
The empowered committee on GST will decide on a new chairman. We will have the first round of meetings, as soon as the new chairman is appointed. We hope the constitutional changes to the GST Bill will be passed in this Budget session
This was touted to be a Make-in-India Budget and you did speak about boosting domestic manufacturing. What you did not speak about was Special Economic Zones and ways to incentivise these, including reducing the Minimum Alternate Tax and the reduction on tax liability. Any clarity?
What is there in the Budget is there, and what is not there, is not there. Any Budget is driven by the revenues and the fiscal space. In the end, the Budget has to balance its figures.
Former prime minister Manmohan Singh said the Budget has good intentions but does not have an adequate road map. What do you have to say?
I can only say thank you.
Everyone, including foreign investors, was looking at this Narendra Modi government's first full-year Budget for Big-Bang reforms, but these did not come through.
How do you define Big-Bang reforms? You tell me what that means. Everyone who comes and tells me to initiate Big-Bang reforms, I ask them that question, but I have never got an answer.
The Budget spoke about changes to the Reserve Bank of India Act for setting up a monetary policy framework. When will it be taken to Parliament to be changed?
Finance Secretary Rajiv Mehrishi: The monetary policy panel is part of this year's Budget. We assure you, it will come sooner rather than later.
For reduction in corporate tax rates, you have suggested it will happen over four years and exemption would also be removed. Can you give us a timeline?
I would have liked to reduce the corporate tax in this Budget. But we needed the corporate sector to be ready to implement the proposed change.
We have generally been viewed as a nation with a high tax rate and that has led to a loss of revenue because of specific exemptions and loss of image as a nation to invest in.
I want to give a signal to investors that India is a destination to invest in.