CHENNAI: With one-and-a-half months left for the Budget, Finance Minister Arun Jaitley on Monday said the government will take “special steps” to boost public spending on infrastructure and initiate measures to rationalize subsidies.
“Even with the present constraint of fiscal deficit in revenue, it’s a challenging and a difficult opportunity for us. But I think we have to take some special steps as far as public investments is concerned,” he said.
The Minister underlined the need for stepping up public investments in infrastructure sector to boost economic growth.
“The whole PPP model is still under stress and we have to revive this. This is a course we are on and hopefully, with clarity in governance, we will be able to proceed,” he said while addressing a CII function here in the southern Indian city.
Referring to the need to rationalize subsidies, the Minister said: “From January 1, LPG subsidy is going through banks…We have to gradually rationalize all possible subsidies.”
The government is expected to incorporate the suggestions of the Expenditure Finance Commission headed by former RBI Governor Bimal Jalan in the budget proposals for 2015-16, which will be presented by Jaitley next month.
Jalan is reported to have submitted interim recommendations to the Finance Ministry suggesting various steps to rationalize subsidies and public expenditure.
The government’s subsidy bill towards oil and fertilizers runs into lakhs of crores of rupees.
The Minister also underlined the need for stability in tax and other policies to make India an attractive place for investment.
The implementation of the Goods and Services Tax (GST), he added, will help in improving the business climate in the country. .
The GST, Jaitley said, was welcomed by different states and that “none of them will lose a single rupee” following the implementation of the new indirect tax regime.
“A seamless transfer of GST is going to add to the GDP.
It will make business easier. In the long run it may even lower taxes. Higher buoyancy is going to help the States in areas where States had no share of taxation (like) service tax,” Jaitley said.
Stating that on Monday almost Rs two lakh crore are collected as Service Tax and States also have a share of it, he said some consuming States will gain from day one of GST implementation.
Referring to the proposed changes in land acquisition laws, Jaitley said that it would eventually help farmers to get a better price for their land.
Moreover, he added, establishment of rural infrastructure and industrial corridors would increase the price of land and generate employment for rural youth.
Commenting on the changes in companies law, he said the government is committed to improving ease of doing business.
“Yes, we are committed to the ease of doing business…we worked out the amendment, I moved the amendment in Parliament that has been unanimously passed by Lok Sabha and it is now pending before the Rajya Sabha,” he added.
Jaitley said he wondered why the industry chambers supported new Companies Act brought by the previous United Progressive Alliance (UPA) government though it had incorporated some of the provisions from anti-terrorism and narcotics laws.
Also, he said the previous companies law unduly favored minority shareholders.
“The basis of company’s law in India is corporate democracy. Rule by minority is completely to the contrary. Now this Company Law which has been passed has provisions which actually enable rule by minority,” Jaitley said.–PTI
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