Replying to the discussion on Budget 2014-15 in Lok Sabha on Friday afternoon, finance minister Arun Jaitley explained the economic philosophy of Modi government. "We have not increased taxes. This is the PM's philosophy and I support PM on this," Jaitley said. The finance minister explained prime minister Narendra Modi's thinking: lower taxes will increase economic activity.
"Yes, we are pro-business. Only if business grows, there will be increase in tax collections, and the government will be able to increase spending on social sector. If there is no growth, what you will be doing is distributing poverty. And this is the difference in approach between the Congress and us," he said. There is no contradiction between being pro-business and pro-poor was Jaitley's refrain. He said there is a tradition in the economic discourse in the country where you are either identified either as being pro-business and pro-poor, and that there is no need for this either/or dilemma.
Taking a nuanced stance on the issue of subsidies, he argued that "unquantified subsidies for unidentified sections" was not feasible. Responding to Congress leader in the House, Mallikarjun Kharge, Jaitley said, "Along with the poor, you and I are also getting subsidy. We need to exclude ourselves." He admitted that there will be changes in the welfare programmes of the UPA government but that it will only be for better targeting so that the people who need it most will get it.
He defended the decision to increase foreign direct investment (FDI) in defence and insurance. He said India is buying its defence equipment from foreign countries entailing huge fund outflows. The increase in FDI in the sector will help in creating defence manufacturing in the country. Similarly, insurance is investment-starved and though the public sector insurance companies like Life Insurance of India (LIC) have done extremely well, there is need for expansion which cannot be done by the public sector alone. This is specially so in health insurance, he said.
Jaitley also struck a conciliatory note saying that schemes span governments and parties, and that the emergence of satellite cities like Noida, Ghaziabad developed over the years and it will be same with the proposed 100 smart cities as well. It will take decades for the new cities to develop.
He was extremely cautious about how the economy is going to behave in the immediate future, saying inflation has moderated, the exports have improved and manufacturing sector is showing signs of revival. But it would be too early to say whether the turnaround has begun.
Finance minister Arun Jaitley responding to requests from MPs and ministerial colleagues during the discussion on the Budget had made two major announcements.
1. A special fund in NABARD of Rs2000 crore for agro-processing units in food parks.
2. To increase de-addiction centres in Punjab which is facing the menace along with other states on the Pakistan border, Rs 50 crore have been allocated for setting more of the centres.
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}