Govt to have non-adversarial tax regime, boost investment: Finance Minister
NEW DELHI: Seeking investments to boost the economy, Finance Minister Arun Jaitley Monday promised a non- adversarial tax regime as well as competitive labour laws to achieve double-digit growth rate.
He also said the government has no intention to tax people retrospectively and will make it easier to do business in the country.Manufacturing sector will succeed only if “we can increase our investments, make our taxation structure comparable, present a competitive labour regime, offer utilities at competitive prices, offer capital at competitive cost”.
There is also a need to relook at the Prevention of Corruption Act to ensure expeditious and honest decision making, Jaitley said, adding that economic decision making involves trial and error and has an element of risk taking.
About consumers in a global business environment, he said they are not “jingoists” that they will buy products only in their own country.
“Your market is global and this has to be the roadmap by which India has to increase the base of manufacturing and the width of our consumers. Not by slogans, but by systematically making our costs competitive to other low cost parts globally,” he said addressing D P Kohli Memorial Lecture, organised by CBI here. Kohli was the first director of CBI.
Referring to the retrospective tax amendment by the UPA government, he said: “Our taxation policy has to be non- adversarial… The present government has no intent to tax people retrospectively”.
Civil servants need to take decisions fast without having the fear of being hauled up later, Jaitley said, adding, “we need to liberalise environment” to achieve double digit growth rate. Economy is expected to grow between 8-8.5 percent in current fiscal.
“I do believe that India’s potential today is very large, we need to grow faster. Our decision making has to be much quicker, our process of political consensus has to be statesman-like and mature. Finally, the environment of suspicion with regard to decision making has to end,” he said.
Jaitley said the corporate tax structure has to be globally competitive and that is why the government has proposed to reduce it from 30 per cent to 25 per cent.He said the retrospective tax claims did not paint an image of India as a fair economy in matters of taxation.”Balance has to be struck. You cannot impose unfair taxation and you cannot have unfriendly contact of revenue department and the assessee,” he said.
“You cannot have an environment of distrust with the assessee. And at the same time, the fairness of the state, cannot be that there is a licence not to pay taxes which are due,” he added.Jaitley said the Goods and Services Tax (GST) law, which is is pending in Parliament, will ensure seamless transfer of goods and services and eventually lower inflation, increase tax buoyancy and GDP.
“This will be the most important indirect tax reform ever in the history of India,” he said.He said phrases like “corrupt means”, “public interest” and “pecuniary advantages” have to be redefined in the present context to differentiate between the act of corruption and honest error.
“An investigating agency’s responsibility is huge. Its discretion is also very large and therefore considering the responsibility and discretion where the agency investigates more serious cases it prosecutes and yet it has to prevent itself from the temptation to persecute,” he said. \
Jaitley said a clear mandate in the 2014 general election has made it easier for the government to take legislative financial decisions.
Besides, he said that with the fall in oil prices, the external factors too have suddenly turned positive.
He said the previous government took 10 years to hike FDI cap in insurance, and nine years to implement GST.”A dynamic society cannot spend a decade deciding on a policy where otherwise there is a consensus,” Jaitley said.
Weaker government and a power centre outside government did not help, the Finance Minister said in an apparent remark to the last UPA regime.”Down the line we started losing the credibility of decision-making process and indecisiveness on part of government,” Jaitley said.
The Finance Minister said agriculture as well as infrastructure sectors face serious challenges due to lack
of investment.”Highways programme has slowed down and investment has not come in railways. We have to invest Rs 70,000 crore in infrastructure sector and that is why we have to delay, a little, the fiscal road map,” Jaitley said.
Sectors like defence and real estates have been opened up for larger global investments, Jaitley said citing decisions taken in the present regime so far.He said CBI has to have the sixth sense to master the art of extracting truth and perfection.Many agencies can falter, he said, adding that nobody is expected to be perfect.
“(However) the two institutions which cannot afford to be imperfect are the judiciary and the CBI… CBI has to strive for perfection”, Jaitley said.
