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| Edited By: Amish Devgan |Source: DNA webdesk |Updated: Mar 19, 2018, 06:50 AM IST
In an interview with Amish Devgan, editor, Zee Business, Finance Minister Arun Jaitley talks about the golden opportunity ahead of the Indian economy. Jaitley shares his view on tax terrorism and explains why the tax department is still sending out notices. Watch the entire interview of Zee Business on April 14, 2015 at 8 pm.
Excerpts:
Q: How has the first year of modi sarkar been?
A: When we formed the govt, 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 that we've taken which 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 our people from investing abroad. So the challenge of credibility has been take care of.
And today when others' pace is slower and India is growing at 8%, 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's 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 which 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. 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 3 more laws will be implemented. We've set 1 April 2016 as the target. People believe that our GDP would grow 1-2%, evasion will be less and there won't be a tax on tax. There'll just be one tax on the final destination. Multiple taxation will be done away with.
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 the corporate tax to be 25%. It's internationally compatible and comparable. The 4th major reform which we made in the last one year is to auction things like spectrum, mines etc to bring transparency. And I would give the credit to PM Modi. And the journey is still not over. It'll take 2-3 years to bring about changes.
Q: Moody's and Fitch have increased India's ratings. Do you think it's a positive sign?
A: We were going towards junk. They made us stable from junk. Moody 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. And the land bill passed in 2013, it 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.
Q: The opposition says that both Modi and Mausam are betraying the farmers.
A: 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 a compensation until they had a loss of 50% or more. We made it 1/3rd.
Q: You think it's an attempt to spoil the government's image by calling you corporate friendly?
A: 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 from the poor man's perspective if you see, 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 2 lacs for just Rs12 annually. We started the pension scheme. We're also working on a composite health scheme. It's our duty to serve the poor.
Q: Congress plans to relaunch Rahul Gandhi with land bill.
A: 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, Modiji 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?
Q: You said india is not a tax haven. Please elaborate.
A: I want India's tax provision to be non-adversarial. Whatever is right and needs to be paid will be asked and what's not important, the government should work on it. But some people took us for granted and thought they'll
get all the taxes waived off if they pressurize 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 from 1st April 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 Rs 40,000 crore to put pressure on the govt. 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.
Q: 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?
A: We decided not to levy retrospective tax with regard to the previous govt. but the old proceedings need to be resolved in the court. It's not possible to scrap old notices and rules. And whatever rulings are in favor
of the assessee, I'm accepting those.
Q: It's been said that some investors are getting a MAT notice. Would you like to say something about that?
A: 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.
Q: What would you like to say about GAAR? Because there's still confusion.
A: 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 It because the condition here today is
slightly different. That's why I've decided to delay it till 2017.
Q: Several experts say that there should be a bank linkage with the sukanya samridhi yojna started by you.
A: 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.
Q: The opposition keeps bringing up the topic of black money. What would you like to say about that?
A: 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 10yrs. And domestically, those who'll do a transaction of over 1 lakh, will have to give their pan
number.
Q: You the opposition is trying to put the govt on a back foot on the issue of black money?
A: They don't have a clue about economy. And the rules which we've enforced will make dealing with black money very difficult.
Q: The industry is worried that you don't have many seats in the Rajya Sabha.
A: We've got 2 ordinances. 3 were passed, and the 4th 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.
Q: But sometimes your party people also fuel all this. What do you have to say on that?
A: I completely accept it. PM modi wants to make it a very strong nation in terms of everything - internal security, economy etc. It's not good to give such careless statements. And whatever good work we do, that's affected by
such statements. It doesn't affect our governance but we just find it very irresponsible. So it's better that the agenda given by the PM should be allowed to move ahead. That'll strengthen the country and is also good for
our party.
Q: Will the black money come back in this country?
A: The hsbc accounts which were there, they were from 2006-07. Now we're in 2015. So now people have not kept their money there still. 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 ceased here. So we've made provisions for both.
Q: Modi said that this government is dedicated to the poor. And since this time, the harvest was ruined by the rains, what would you say as the finance minister?
A: We've appointed senior ministers in every state to visit the affected areas. Were examining the proposals made by the state governments. And the PM has declared the criteria and quantum to help the affected ones. And
we'll take more steps once we get more composite proposals.
Q: Will we see the land bill getting passed in the next session?
A: We'll try to convince the opposition. I'm sure the bill will come to existence.
Q: Last year, the target of divestment was reduced.
A: As per our expenditure and revenues, we divested around Rs 38-39,000 crore and it was sufficient for us. But it was the largest divestment in the country's history in one year. This year, we've kept 20-22 companies and the process has already begun. And we've done the first disinvestment in the first month itself and received an overwhelming response. And that's why we'll try to attain the target this year.
Q: Do we see a big investigation happening on Moin Qureshi because this issue was revealed by Zee media.
A: I don't comment on individual cases. But we're giving full autonomy and power to agencies like ED to investigate is such matters and the govt would take it to a logical end.
Q: how do you see the next one year as the finance minister?
A: The first year was full of excitement and expectations and we started a process. And in the 2nd 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.
Q: What are your expectations from Bihar elections after the defeat in Delhi?
A: It's always a setback. But it's okay to lose 1 or 2 elections, it's a part of politics. We'll try our best to win in Bihar.
Q: You started the mudra bank. What would you like to say about it?
A: Those people were unfunded. So we're devising a way to fund them. It's for self employed entrepreneurs which includes the poor, dalits, backward people and minorities who never had a means to get funds, they can now get funds and provide employment further to people as well.
