Jaitley pitches for reforms, not populism, to push growth

Source : PTI 

  Making a case for 8-9% growth rate, Finance Minister Arun Jaitley on Saturday indicated that his upcoming Budget will not resort to “sheer populism” for good ratings and will focus on structural reforms. He also expressed hope that the Congress will “see reason” and help the government pass the Goods and Services Tax (GST) Bill in the Budget Session of Parliament beginning next month. “Indian economy has to be out on sounder platform. Don’t forget India is one of the few economies of the world that survived 2001, 2008 and 2015 (global crises),” he said. Stating that fundamentals have to be strong enough, the finance minister 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).” Jaitley said the government would not pursue retrospective tax claims and added that he would like the remaining two or three disputes to get resolved “as expeditiously as possible”. Taxes which are payable must be collected but “there must not be unfair taxes” as unfair assessments bring “bad name” and no revenue, he said at the ET Global Business Summit in New Delhi. Hoping that the Congress would support GST that aims to create a unified market across India, he 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," the minister clarified. Jaitley highlighted the need for carrying on structural reforms, saying 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% is not our optimum range. The Indian normal is 8-9% 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. “We have potential for increasing manufacturing. We have innovative skills. Our labour cost is not rising as they are rising in China. We are not part of factor or transitions that are taking place in China,” he said. The finance minister said the economy the world over is 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 that given these advantages “what we have to do is to put our house in order. I think the first important thing that we have to do is to carry on structural reforms”. Focus, he said, should be on infrastructure sector, irrigation, improving agriculture productivity and manufacturing. “At the end of the day, what is it that you are asking for is to get that cutting edge that you must grow at 1-1.5% faster than what you are doing today. “I think with all these changes, and hopefully, in future rain gods being kinder to us than in the last two years, it is not very difficult or impossible target for India to achieve. We all know that our potential is right there,” Jaitley added.  

January 30, 2016 | 04:45pm IST