Modi government committed to lower taxes, finance minister Arun Jaitley says
July, 15th 2014
The Modi government is committed to lower taxes, finance minister Arun Jaitley told TOI in his first interview to a newspaper after the Budget. It was an article of faith with him as well as the Prime Minister that lower taxes gave people money to spend which, in turn, fuelled economic growth, he said.
In this context, he clarified that the "bitter pill" referred to by Modi didn't mean higher taxes. The rub could lie, he said, in people being asked to pay more for utilities. He said, "Bitter pill could mean that for utilities the user will pay for what they use. Unless users pay, utilities can't survive." This could mean higher electricity charges as well as a cut in subsidies.
Click here to read Arun Jaitley's complete interview
Jaitley spoke at length on the Budget's direction. Indicating that the government would shun grandstanding on reforms and avoid political confrontations, he said he hadn't gone for "bold" announcements that later came unstuck and had instead pushed for reviving the manufacturing, real estate and tourism sectors.
He added that he had retained the UPA government's disinvestment policy as well as its social sector schemes and hoped to get its support for this.
The minister said while interest rates were the domain of the RBI, he hoped they would come down when inflation dropped as that would spur greater spending on housing. The sector has been hit by delayed projects and mounting inventory in the wake of the severe economic slowdown and high interest rates, he said.
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Jaitley stoutly defended the controversial budgetary allocation of Rs 200 crore for a statue of Sardar Patel when several key schemes have received lower sums. He said the country had not returned its debt to "this great son" and people with lesser contributions have hundreds of institutions named after them.
He also said the decision to allocate Rs 100 crore for several schemes, a move which has faced strong criticism, was a "token" amount to start a scheme and when these schemes acquire concrete shape more funds would be provided.
Even before he was asked about his reluctance to scrap the provision for retrospective taxes, Jaitley appeared to anticipate it and said that he had "cushioned" against Parliament's ability to bring retrospective taxes and create fresh liabilities for corporates.
He also said the Modi government's reform agenda wouldn't be confined to the budget alone, and other measures could be taken from time to time. For instance, the hike in rail fares and extension of excise duty cuts for automobiles and white goods before the budget.
Asked if it was a 'thanksgiving' Budget for voters who gave the BJP a sweeping majority in the Lok Sabha polls, he responded, "Partly it is because of my own and the Prime Minister's economic ideology of lower taxation, more economic activity, more spending and more saving."
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On whether he had refrained from making a full disclosure of the state of the economy, he replied, "I have said so to the extent it is necessary, in cautious and measured language. I am not in the process of scoring debating points with the previous government. Now, we have to deliver. And, if we have to deliver, I didn't want to make any statement which upset the sentiment. My job is to create a positive sentiment for India."