Finance minister Arun Jaitley on Monday argued in favour of rationalising subsidies and boosting public spending to provide a fillip to the cash-starved infrastructure sector.
“From January 1, LPG subsidy is going through banks...We have to gradually rationalise all possible subsidies,” the minister said while addressing a Confederation of Indian Industry (CII) function here.
The government is expected to incorporate the suggestions of the Expenditure Finance Commission (EMC), headed by former Reserve Bank governor Bimal Jalan, in the budget proposals for 2015-16.
Jaitley had announced setting up of EMC in his maiden budget speech last year.
The Commission is expected to submit its interim report before the 2015-16 budget and its final report before the budget of 2016-17.
The subsidy bill on food, petroleum and fertilisers is estimated at `251,397.25 crore for 2014-15, up 2.47% over the previous fiscal. It was `245,451.50 crore in the revised estimates for 2013-14.
On public investment in infrastructure, Jaitley said that “even with the present constraint of fiscal deficit in revenue, it’s a challenging and a difficult opportunity for us. But, I think we have to take some special steps as far as public investments are concerned.”
Noting that the implementation of the goods and services tax (GST) would improve business climate in the country, Jaitley stressed the need for bringing in stability in the tax regime and other policies, which would make India an attractive investment destination.
“A seamless transfer of GST is going to add to the GDP… it will make business easier and in the long run, it may even lower taxes,” he said, adding that higher buoyancy would help the states, especially in areas where they had no share of taxation like service tax,” Jaitley said.
The finance minister also said that the proposed changes in land acquisition laws would eventually help farmers to get a better price for their land.
The Centre, he added, was committed to ease of doing business and was addressing several issues in the Companies Act.
“Yes, we are committed to the ease of doing business...we worked out the amendment, I moved the amendment in Parliament that has been unanimously passed by Lok Sabha and it is now pending before the Rajya Sabha,” he added.