Finance minister Arun Jaitley has hinted at not raising tax rates and providing incentives for manufacturing in the upcoming budget, while asserting that “structural changes” will have to be made to get the economy on track for 8-9% growth.
Hard-selling India to global investors at the World Economic Forum, the finance minister also promised a stable tax regime that will not come up with unreasonable demand and change taxes retrospectively.
“In terms of incentivising manufacturing, it is very much on our agenda,” he said. “Even though we had few days during the last budget we did give to the ministry of micro small and medium enterprises (MSME), National Investment and Manufacturing zone(NIMZ) and so on because we wanted the sector to pick up and that priority is fairly high on our agenda.”
While referring to various sources of revenue for the government including divestment, dividend and spectrum suction, Jaitley said as economic activity picks up, the Centre’s capacity to raise revenue will also increase.
“I am not in favour of raising the rates of taxation as that could become counter-productive,” he added. “The global community and Indian tax payers want to be convinced that there will be a stable tax regime... I cannot come up with unreasonable demand and change taxes retrospectively. Such demands as such do not earn us any revenue and give us only bad name.”
Jaitley also expressed confidence that India was close to the point when investment will pick up as there are a large number of investors waiting to come in.
To a question on whether it will be a ‘big bang’ budget next month, he said if the sum total of all the steps the government has taken so far is considered, it would be much more than big bang. “The budget will be a very important occasion for the government but then the next 364 days are equally important.”