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Finance Minister Arun Jaitley vows to amend land acquisition act , promises non-aggressive tax policy

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Finance Minister Arun Jaitley on Sunday said the government will amend the tough land acquisition law even if the opposition does not support as it looks to restore confidence in the economy. On a day when Prime Minister Narendra Modi is expanding his Cabinet, Jaitley promised a rational, non ultra-aggressive tax policy and make India a global manufacturing hub. "Some changes may be necessary (to the Land Acquisition Act). We will first try to reach a consensus and if that is not possible we will go ahead and take the decision," he said addressing India Global Forum meeting here.

The Land Acquisition Bill, which was passed during the previous UPA regime with then opposition BJP supporting it, seeks to set a fair compensation for farm land being taken over for industrial projects. But the law has made land acquisition very difficult, slowing projects. States too have come out openly against the law saying it had hurt the process of acquiring land for infrastructure projects. Jaitley said that the "obstacles" to the land laws would have to be first removed in order to implement the concept of smart cities in India.

In Budget 2014-15, Jaitley had proposed an allocation of Rs 7,060 crore for developing 100 'smart cities' in the country. The Rural Development Ministry has already suggested a number of amendments to the Land Acquisition Act that will water down provisions such as mandatory consent of at least 70% locals for acquiring land for PPP projects, and 80 per cent for private projects. Jaitley also said that the government's disinvestment programme will "unfold" in the next couple of days. He added that the government aims to bring down its equity in public sector banks to 52 per cent.

"Economy was and is in a challenging situation and one of the principal challenges before us is to restore the confidence in the Indian economy, to expand economic activity and move towards increasing the growth rate," he said. Stating that growth rate next year will be "a little better", he said if the trend continues, India can be on high growth trajectory soon.
"We have seen the challenges before the economy. So, a reasonable and rational tax policy (is needed). It can't be ultra aggressive with the tax payers," the Minister said. 

"We expect the economy to grow reasonably, I would say modestly, this year. We expect them to grow a little better next year and hopefully if this trend does continue, India can be on high growth trajectory," Jaitley said. Hinting that amendments to the Goods and Services Tax (GST) may be introduced in the ensuing Winter session of Parliament, he said the government is in the final stages of discussion with states on the issue.

"I am in the last stage of my discussions with the states on the eve of Parliament session before introducing the amendments to the GST law in Parliament," he said. The month-long Winter Session of Parliament is scheduled to commence from November 24. The GST regime aims at subsuming most of the indirect taxes at the central as well as state level. The UPA government in 2011 introduced a Constitution Amendment Bill in the Lok Sabha to pave the way for introduction of GST.

The GST rollout has missed several deadlines because of lack of consensus among states over certain crucial issues on the new tax regime. Jaitley expressed hope that the long-pending Insurance Laws Amendment Bill, that seeks to raise the FDI cap in the sector to 49%, from 26%, will get Parliament approval. "We have opened up investments in various sectors. I do hope this (Winter) session I will be able to pass the Insurance Bill, he said. 

Jaitley, who holds the additional charge of Defence Ministry, said the first priority of the government will be to maintain best relations with neighbouring countries and also peace within India so that insurgency can be curtailed. In a stern warning to Pakistan, he said there cannot be a dialogue with Islamabad if ceasefire violations are repeated. "Yes, there should be a dialogue. We will welcome it but then the environment for dialogue has to be created by both the countries. One of them cannot upset the environment and then say why dialogue is not taking place," he said.

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