We are fair but not a tax haven: Finance Minister Arun Jaitley

How has the first year of Modi government been?

When we formed the government, our country stood nowhere in the eyes of both local and international investors. It had completely fallen off the radar. Our first challenge was to make the economic status credible and the credibility of the decision making process. There hasn't been a single decision we've taken that could be called as detrimental to the economy. Our first priority was to ensure capital to promote industries and infrastructure or help the poor. We stopped people from investing abroad. Thus the challenge of credibility was taken care of. And today, India is growing at 8% when others' pace is slower. The same people who doubted India are now counting on it to accelerate the growth of other BRICS countries. I also would like to implement ease of doing business along with promoting investment. I don't want investors to face any hassles while setting up a project.

The work is in progress. There are two reasons for the negative image of our country. First is the taxation arrangement. There were too many taxes and they were hostile and discouraged investors. I've tried to make the regime non-adversarial from adversarial. Secondly, I would try to pass the GST in the next session of parliament. It's going to be the most radical tax reform post independence according to me. I want to pass the constitution amendment this time following which three more laws will be implemented. We've set April 1, 2016, as the target. Multiple taxations will be done away with. There will just be one tax on the final destination. As of now, most governing bodies are on our side. It'll help in GDP growth and seamless travel of goods. Asean countries have a corporate tax of 21-21.5%, some have made it 15%. And ours is 34% but due to exemptions it comes down to 23%. I asked corporate tax to be 25%. It's internationally compatible and comparable. The fourth major reform that we made in the last one year is to auction things like spectrum, mines, etc, to bring transparency. The journey is still not over. It will take 2-3 years to bring about changes.

You said India is not a tax haven. Please elaborate.

I want India's tax provision to be non-adversarial. Whatever is right and needs to be paid for will be asked and what's not important, the government should work on it. But some people took us for granted and thought they will get all the taxes waived off if they pressurise us. So I said we're not a tax haven. UPA levied a tax during Pranab Mukherjee's time, which was not welcomed by foreign investors. And I ended it April 1, 2015, onwards. But for the previous years, they still had to pay. So they published in papers that the government is levying a tax of 40,000 crore to put pressure on the government, to which I said that we're fair but not a tax haven. Taxes which are payable will be recovered. And which are not entitled, anyone is free to raise a grievance.

During the election campaign, you said there shouldn't be any tax terrorism in the country. Do you think in the last one year, tax terrorism has reduced?

We decided not to levy retrospective tax with regard to the previous government, but the old proceedings need to be resolved in the court. It's not possible to scrap old notices and rules. And I am accepting all rulings that are in favour of the assessee.

It's been said that some investors are getting a MAT notice…

Notices are being sent because of the old laws and cases which people have lost and that's why we're asking them to pay.

What would you like to say about GAAR? There seems still confusion on it.

We're still in process and that's why I don't want to talk about it. And whichever developed countries are there in the West, GAAR has been enforced in all of them. We've deferred GAAR because the condition here today is slightly different. That's why I've decided to delay it till 2017.

Moody's and Fitch have raised India's ratings. Do you think it's a positive sign?

We were going towards junk. They made us stable from junk. Moody's made it positive from stable. But I'm still not satisfied. I feel the real potential of our economy is not real or stable. And when the rest of the world's at a slower pace, it's a golden opportunity for us to capture this space. And I first want to get GST approved. Secondly, regulations for company - which the UPA had laid down - I will strengthen it. The land bill, passed in 2013, was stopping the growth of rural areas. And rectifying it will lead to growth. The laws of 2013 would not have permitted for this development but the laws of 2015 can.

Do you think it's an attempt to spoil the government's image by calling you corporate friendly?

We're not corporate friendly. We're taking money for spectrum and other things. Earlier, it was being given for free or very cheap. So who was corporate friendly then? Improving the economy of the country improves the state of the common man because the amount collected by the government increased employment. And if you see from the poor man's perspective, we've opened 14 crore bank accounts. And we initiated the process of depositing money in those accounts. And under the social security scheme, we plan to give the poor an insurance worth Rs two lakh for just Rs 12 annually. We started the pension scheme. We're also working on a composite health scheme. It's our duty to serve the poor.

The opposition keeps bringing up the topic of black money…

There's a lot of black money within and outside the country. And the norms I've announced in this Budget, has anyone been able to do it in the last 68 years? For people with foreign assets and accounts, we've asked them to disclose them and pay the penalty. And if you don't abide, there'll be a criminal case and you can even be punished for 10 years. And domestically, those who'll do a transaction of over Rs 1 lakh, will have to give their PAN number.

The industry is worried that you don't have many seats in the Rajya Sabha...

We have got two ordinances. Three were passed, and the fourth one will also get passed. You can delay or defer them but can't stop them. So even if the opposition is into its own politics, the country won't stop because of it.

Will the black money come back in this country?

The HSBC accounts were there from 2006-07. Now we're in 2015. So now people have not still kept their money there. So we've devised this rule where they have to pay tax on it and the penalty. Even if they've took it out of there, they need to pay for it. Because if they're caught again, the equal amount worth of assets will be seized here. So we've made provisions for both.

Will we see the land bill getting passed in the next session?
We'll try to convince the opposition. I'm sure the bill will come to existence.

The opposition says that both Modi and weather are betraying the farmers...

As compared to what the UPA did, we've increased it by 1.5 times. And if the economy improves, I'd try to increase it more. Congress didn't use to give any compensation until they had a loss of 50% or more. We made it one-third.

Congress party plans to relaunch Rahul Gandhi with land bill…

They've always worked on deteriorating the image of the country and discouraging investors. We got the power from them after they ruined everything. And today, Modi has removed the concept of corruption from this country. There has been no allegation on any minister, decision or transaction in the last 12 months, while UPA was full of scams and scandals. How can they launch anyone after all the comparison?

Several experts say that there should be a bank linkage with the Sukanya Samridhi Yojna started by you…

Today, the highest amount of interest in any small saving scheme is in this Yojna to save money in the name of your girl child. It's a good suggestion and we'll consider it.

How do you see the next one year as the finance minister?

The first year was full of excitement and expectations and we started a process. And in the second phase, they will be implemented. The time after the first year is the slog period in which we have to execute the laws and rules. And India would be a very fast growing economy and I can see it happening.