Finance minister Arun Jaitley said addressing growth expectations with limited resources is a daunting task for the six week old NDA government.
While blaming the previous government for the challenges faced by the economy, he praised Prime Minister Narendra Modi for his support.
“It had to be more than an accounting exercise,” he said in a post-budget interview with Rajya Sabha Television. “It is more of a policy statement and vision document,” he said.
Jaitley said that his government has sorted out most issues pertaining to the goods and services tax with state governments. However, issues such as taxing petroleum products and entry tax remain to be solved. He told that he may go ahead by leaving such issues outside the purview of the GST.
“If I can’t get the best GST, I will get a good GST,” he told senior journalist MK Venu.
He said there is nothing wrong in taking help from foreign companies in the defence sector to set up strong firms with majority shareholding of domestic players.
He said people do not make investments as they are wary of tax administration. “They had to be given confidence to invest to create a favourable environment for investors.”
The finance minister said he had cut taxes on several items to support manufacturing sector. “I raised taxes only on products injurious to health,” he said.
The FM said he wanted the common man to have more money to spend and that the revenue loss due to higher tax slabs can be offset by raising some indirect taxes. “I raised the tax slab by Rs 50,000 which isn’t the norm. This attacks inflation because people will save more,” he said, adding that he was hopeful of RBI cutting policy rates.
On the issue of investments locked up in disputes between judiciary and enforcement agencies, he called for a balance, saying, otherwise people will flee this country. “I tried to provide a fair tax regime,” he said. He was of the opinion that there has to be a debate on how natural resources should be allocated and that auctioning resources is a way to curb corruption.
Jaitley said his disinvestment target is over Rs 50,000 crore. He said on divestment, he is merely following the policies of the previous government.
On the issue of his ambitious revenue projection, the finance minister said limiting fiscal deficit to 4.1% of the GDP is a daunting task. “I will take the challenge. I am not starting with a failure. I would rather try,” he said.
The minister said higher GDP growth will solve most issues faced by the government. He said growth will provide funds to be spent on social sector schemes.