Finance Minister Arun Jaitley today said that this year’s budget will not be guided by populist considerations but instead focus on structural reforms. He said the general budget will be determined by the resources, growth potential and tax buoyancy. Echoing the Prime Minister Narendra Modi’s views on subsidies, Jaitley said that the government was not against the subsidies per se but these were meant for the needy and not the wealthy.
Addressing the Economic Times’ Global Business Summit in New Delhi Arun Jaitley said: “The Budget has to weigh the areas of weaknesses where investments are required. Therefore, I have to pitch in that direction. If a Budget for the cause of ratings goes in for sheer populism, it’s not necessary that the cause of economics or even sounder politics that we are aiming at (is served).”
Talking about the need for big structural reforms, Jaitley said the focus should be on infrastructure, irrigation and farm productivity.
“We probably have potential to have a growth that is higher than what we have achieved. This 7-7.5 per cent is not our optimum range. The Indian normal is 8-9 per cent category. And it is only when you grow at that pace, you can get rid of poverty,” he said.
He spoke of a huge human resource, trained minds as well as a very large market as positives for India.
Jaitley also sounded optimistic in getting the GST bill passed in the upcoming budget session that will overhaul the country’s complex indirect tax structure and boost the GDP growth by 1-2%.
Hoping that the principal opposition party Congress would support the GST bill in the Rajya Sabha Jaitley said: “It (GST) is the important reform of the UPA. If I have to credit the authorship of it, I have to give credit to them. Now, if the author turns against his own script, what do I make? I have reached out (to the Congress), I have spoken to them. I have explained to them and I hope they will see reason… see the rationale behind passing GST.”
“The UPA allies like RJD, NCP and JD-U are openly supporting it,” Jaitley said, adding that even the Congress-ruled states are 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,” said the finance minister who has been trying to win the support of Congress party in the Rajya Sabha as the government doesn’t have majority in the house.
It has become Congress versus all, Jaitley said it would be “very good” if the constitutional amendment Bill to roll out GST is passed by consensus.
“It is very good to have laws passed by consensus. A law like this which impacts taxation structure of India being passed by consensus is our preference, otherwise it can be put to vote,” the minister said.
Several important legislations concerning coal, mining and the like were passed by Parliament with support from several opposition parties with the exception of the Congress, Jaitley added.
The Congress has stalled the passage of the constitutional amendment Bill. The party is demanding a cap on the GST rate in the Constitution itself, removal of the proposed 1% additional tax on inter-state movement of goods and setting up a judicial panel to adjudicate disputes among states.
Lack of consensus between the NDA government and principal opposition party Congress over some of the provisions of the GST bill has derailed the government’s plan to roll out GST from April 1, 2016.